DAVID L. HORAN, Magistrate Judge.
Defendant Blue Cross and Blue Shield of Louisiana ("BCBSLA") has filed a Motion for Attorneys' Fees, see Dkt. No. 63 (the "Fees Motion"), seeks an award of attorneys' fees and costs as a prevailing party under section 502(g)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(g)(1).
The Court has dismissed with prejudice Plaintiff Richard H. Weiner, DPM, PA's ("Dr. Weiner") claims against BCBSLA be on the grounds set forth in the Court's August 17, 2018 Memorandum Opinion and Order [Dkt. No. 60] and, on BCBSLA's motion [Dkt. No. 62], dismissed BCBSLA's counterclaim against Dr. Weiner with prejudice. See Dkt. No. 68.
For the reasons and to the extent explained below, the Court GRANTS in part and DENIES in part Defendant Blue Cross and Blue Shield of Louisiana's Motion for Attorneys' Fees [Dkt. No. 63].
As the Court explained in its August 17, 2018 Memorandum Opinion and Order:
Dr. Weiner is a healthcare provider who participates in the Blue Cross and Blue Shield of Texas ("BCBSTX") provider network, treating patients who are participants and beneficiaries under health benefit plans administered by BCBSTX. Defendant Blue Cross and Blue Shield of Louisiana's ("BCBSLA") insureds have access to BCBSTX's provider network for services.
Dr. Weiner treated a patient who was insured by BCBSLA under an Employee Health Benefit Plan (the "Plan") established and maintained for the patient's employer. The Plan vests BCBSLA with full discretionary authority to determine eligibility for benefits and/or to construe the terms of the Plan.
At the time of treatment, Dr. Weiner obtained an assignment of benefits from the patient, allowing Dr. Weiner to bill BCBSLA directly for payment of services. The Plan contains an anti-assignment provision prohibiting assignment of benefits to a third-party provider. Specifically, the Plan states:
Dkt. No. 40 at 107 (App._102).
Dr. Weiner treated the patient and submitted a claim to BCBSLA. BCBSLA initially denied the claim, indicating that the Plan excluded the treatment. Dr. Weiner appealed, and BCBSLA paid the claim. BCBSLA later determined that the claim had been paid in error and sought a refund from Dr. Weiner. Dr. Weiner appealed the refund request. BCBSLA denied the appeal, and Dr. Weiner asked BCBSLA to review the claim. In the meantime, BCBSLA recouped the money from a subsequent payment to Dr. Weiner for treatment of a different patient.
Representing himself pro se, Dr. Weiner filed suit in the small claims court of Dallas County, Texas against BCBSLA for "theft of money involving recoupment for medical services." Dkt. No. 1-2 at 6.
BCBSLA removed the case to this Court on the basis of federal question jurisdiction. See Dkt. No. 1.
Dr. Weiner then filed an unverified amended complaint alleging that BCBSLA's recoupment violated ERISA. See Dkt. No. 8. The Court, on its own motion and after considering submissions from the parties, determined that the Court has subject matter jurisdiction because Dr. Weiner's claim to recover payments allegedly owed to him under the Plan is dependent on his status as an assignee of a Plan enrollee's benefits and relates to an ERISA plan and so is preempted. See Dkt. No. 33.
BCBSLA moves for summary judgment on Dr. Weiner's claims. See Dkt. No. 54. BCBSLA contends that there are no issues of material fact concerning either Dr. Weiner's lack of authority to sue BCBSLA for improper recoupment or BCBSLA's discretion in denying Dr. Weiner's claim. BCBSLA argues that Dr. Weiner has no right to sue BCBSLA for the claims brought in this lawsuit because (1) the health benefit plan at issue specifically prohibits an assignment of benefits and (2) the patient does not possess the right to sue for recouped funds. BCBSLA also argues that it did not abuse its discretion under the Plan when it denied the Dr. Weiner's claim because the claims are excluded from coverage under the Plan and Dr. Weiner was so informed when he sought preapproval for the procedure.
Dkt. No. 60 at 1-3.
The Court agreed and granted BCBSLA's Motion for Summary Judgment [Dkt. No. 54]. See id. at 8-15.
BCBSLA now asserts, in support of its Fees Motion, that
In April 2017, BCBSLA sought an early settlement of this matter under Federal Rules of Civil Procedure 16 and 26. Plaintiff refused. The Parties also conducted a settlement conference with U.S. Magistrate Judge Stickney on June 2, 2017. Although Plaintiff's allegations lacked legal or factual basis, BCBSLA offered Plaintiff a monetary amount in settlement that was multiples of the amount of benefits Plaintiff placed at issue. Plaintiff refused. Whereupon, BCBSLA defended Plaintiff's claim and became a prevailing party, thus achieving the degree of success necessary to merit an award of fees. Furthermore, all factors the Court considers when awarding fees weigh in BCBSLA's favor.
BCBSLA now moves to recover its attorneys' fees and costs incurred subsequent to its initial case review and efforts to reach an early resolution.
Dkt. No. 63 at 2 (footnotes omitted).
In response, Dr. Weiner explains that, "upon receipt of the decision by U.S. Magistrate David Horan, issued a check to Defendant in the amount of overpayment it requested," which "was made to Defendant promptly and in good faith," and "object[s] to Defendant's request for Attorney fees which is inappropriate, excessive, and acts as a barrier to anyone acting pro se seeking recovery of money taken from unrelated patients after making proper BCBS appeals." Dkt. No. 65 at 4.
According to Dr. Weiner,
Id. at 10.
In reply, BCBSLA contends that Dr. Weiner's
Dkt. No. 66 at 1-2 (footnotes omitted).
"BCBSLA prays the Court will enter an order awarding BCBSLA its attorneys' fees as a prevailing party under section 502(g)(1) of the Employee Retirement Income Security Act of 1974 (`ERISA'), 29 U.S.C. § 1001, et seq., in the amount of $34,963.50 and $45.14 in costs." Id. at 2 (footnote omitted).
In an unauthorized sur-reply, Dr. Weiner explains that he "disagrees that Defendant should be awarded attorney fees, although Defendant ultimately prevailed on the merits of its position in this Court." Dkt. No. 67 at 2.
As the United States Court of Appeals for the Fifth Circuit has recently explained, under 29 U.S.C. § 1132(g)(1),
North Cypress Med. Ctr. Operating Co., Ltd. v. Aetna Life Ins. Co., 898 F.3d 461, 485 (5th Cir. 2018) (footnotes omitted).
"A district court must explain its decision to deny fees." Id. (internal quotation marks omitted).
But, if "it is determined that the [claimant] is entitled to attorneys' fees, it is incumbent upon the district court to `utilize the lodestar method to determine the amount to be awarded.'" Lain v. UNUM Life Ins. Co. of Am., 279 F.3d 337, 348 (5th Cir. 2002) (quoting Wegner v. Standard Ins. Co., 129 F.3d 814, 822 (5th Cir. 1997)), overruled on other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115-19 (2008).
Under the lodestar method, "the district court must determine the reasonable number of hours expended on the litigation and the reasonable hourly rates for the participating attorneys, and then multiply the two figures together to arrive at the `lodestar.'" Wegner, 129 F.3d at 822 (footnote omitted).
"A reasonable hourly rate is the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation." Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988) (citing Blum v. Stenson, 465 U.S. 886, 895-96 n. 11 (1984)). The relevant legal community is the community in which the district court sits. See Tollett v. City of Kemah, 285 F.3d 357, 368 (5th Cir. 2002).
The party seeking reimbursement of attorneys' fees bears the burden of establishing the number of hours expended through the presentation of adequately recorded time records as evidence. See Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). The Court should use this time as a benchmark and then exclude any time that is excessive, duplicative, unnecessary, or inadequately documented. See id. The hours remaining are those reasonably expended. See id. There is a strong presumption of the reasonableness of the lodestar amount. See Perdue v. Kenny A., 559 U.S. 542, 552 (2010); Saizan v. Delta Concrete Prods., Inc., 448 F.3d 795, 800 (5th Cir. 2006).
After calculating the lodestar, the Court may either (1) accept the lodestar figure or (2) decrease or enhance it based on the circumstances of the case, taking into account what are referred to as the Johnson factors. See Wegner, 129 F.3d at 822; Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), overruled on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 90 (1989).
The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the legal issues; (3) the skill required to perform the legal service properly; (4) the preclusion of other employment by the attorney as a result of taking the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or other circumstances; (8) the monetary amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) whether the case is undesirable; (11) the nature and duration of the professional relationship with the client; and (12) awards in similar cases. See Johnson, 448 F.2d at 717-19; see also Saizan, 448 F.3d at 800.
Because the lodestar is presumed to be reasonable, it should be modified only in exceptional cases. See Watkins, 7 F.3d at 457.
Further, the lodestar amount may not be adjusted due to a Johnson factor that was already taken into account during the initial calculation of the lodestar, see Saizan, 448 F.3d at 800, and the lodestar calculation may take into account several Johnson factors, see Black v. SettlePou, P.C., 732 F.3d 492, 503 n.8 (5th Cir. 2013).
The Court recognizes that courts have noted that the analysis set forth above, and particularly the interplay of the lodestar analysis and the Johnson factors, may have been called into question. See Perdue, 559 U.S. at 552-53; S&H Indus., Inc. v. Selander, No. 3:11-cv-2988-M-BH, 2013 WL 6332993, at *2-*3 (N.D. Tex. Dec. 5, 2013).
But the United States Court of Appeals for the Fifth Circuit, without comment or reference to the United States Supreme Court's decision in Perdue, has continued to utilize the approach laid out by this Court. See Black, 732 F.3d at 502-03; but see In re Pilgrim's Pride Corp., 690 F.3d 650, 663-64 (5th Cir. 2012) (analyzing whether any changes brought about by Perdue apply to bankruptcy attorneys' fees calculations); but see also In re ASARCO, L.L.C., 751 F.3d 291, 296 (5th Cir. 2014) (following Pilgrim's Pride). And the Fifth Circuit, in a recent published opinion, has rejected the argument "that Perdue clearly disfavors applying the Johnson factors to determine a fee award and instead requires the use of only the lodestar." Combs v. City of Huntington, Tex., 829 F.3d 388, 393 (5th Cir. 2016). The Court of Appeals explained that
Id. at 393-95.
Perdue, then, did not change the landscape of calculating attorneys' fees awards in the Fifth Circuit. Accordingly, the analysis below will take into account the necessary factors when determining the appropriate amount of attorneys' fees to be awarded under Section 1132(g)(1).
As Dr. Weiner concedes, and as BCBSLA explains, see Dkt. No. 63 at 4-5, 9, BCBSLA succeeded on the merits in this action, with a successful Motion for Summary Judgment resulting in dismissal with prejudice of Dr. Weiner's claims, and therefore is eligible for an award of its reasonable attorneys' fees and costs under Section 1132(g)(1).
The Court then may — but is not required to — consider the Bowen factors in deciding whether to award attorneys' fees under Section 1132(g)(1). See LifeCare Mgmt. Servs. LLC v. Ins. Mgmt. Adm'rs Inc., 703 F.3d 835, 846, 847 (5th Cir. 2013) (noting that "the Supreme Court has clarified that we do not need to consider the Bowen factors" and that, "[a]s the Supreme Court made clear in Hardt, . . . the Bowen factors are discretionary"); Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 254-55 (2010) ("Because these five factors bear no obvious relation to § 1132(g)(1)'s text or to our fee-shifting jurisprudence, they are not required for channeling a court's discretion when awarding fees under this section."); see also Victory Med. Ctr. Houston, Ltd. P'ship v. CareFirst of Md., Inc., 707 F. App'x 808, 810 (5th Cir. 2018) ("Once a court determines that a party is eligible for a fee award, it may then examine the facts of the case to determine if a fee award is appropriate. . . . . A district court has `broad discretion' under Hardt in awarding attorneys fees, limited only by the language of § 1132(g)(1).").
Here, where the parties address the factors, the Court will as well.
The Court is persuaded by BCBSLA's analysis that this factor weighs in favor of awarding fees:
Dkt. No. 63 at 5-6.
Dr. Weiner disagrees and contends that the legal issues he raised based on his oft-cited authorities needed to be raised and should eventually be resolved by the United States Supreme Court. See Dkt. No. 65 at 5-9.
But, although Dr. Weiner is not an attorney, his continuous efforts to press his positions based primarily on a district court decision that was reversed before Dr. Weiner filed this suit support a finding that this factor favors an award of fees.
Dr. Weiner does not dispute his ability to satisfy a fee award.
Thus, the second factor weighs in favor of awarding fees and costs under Section 1132(g)(1).
Dr. Weiner contends that "[t]he risk now understood of opposing attorney fees and low amount create a significant barrier to seeking money by a pro se provider Plaintiff." Dkt. No. 67 at 3. BCBSLA essentially agrees and urges that this factor therefore weighs in favor of awarding fees:
Dkt. No. 63 at 8 (footnotes omitted).
The Court agrees that an award of fees here would deter other persons acting under similar circumstances as Dr. Weiner has in this case.
The Court finds that this factor weighs slightly in favor of a fee award, as BCBSLA contends that "the legal defense of the plan's unambiguous terms is consistent with BCBSLA's fiduciary duties" and "BCBSLA's defense of Plaintiff's groundless claims, and successful recovery of BCBSLA's Counterclaim, was for the benefit of the plan's participants and beneficiaries." Dkt. No. 63 at 8.
The Court agrees with BCBSLA that, where "BCBSLA prevailed on all critical issues before the Court," "the merits of the Parties' positions favor the award of attorneys' fees to BCBSLA." Id. at 9.
Having considered all of the factors and Section 1132(g)(1)'s language, the Court determines in its discretion that it is appropriate to award BCBSLA its reasonable attorneys' fees and costs under Section 1132(g)(1).
BCBSLA's Fees Motion is supported by the Declaration of Jonathan M. Herman, which incorporates his firm's records. See Dkt. No. 64.
Mr. Herman declares that he is "the founding and Managing Member of the Herman Law Firm," is "an attorney licensed to practice in Louisiana (admitted on October 7,1994) and Texas (admitted on March 17, 2006)," is "admitted to practice before all federal courts in Louisiana and Texas" and "was admitted to practice before the U.S. District Court for the Northern District of Texas on October 22, 2007," and is "lead counsel for the Louisiana Health Service & Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana (`BCBSLA') in this matter." Id. at 1.
Mr. Herman explains:
Id. at 2-3.
Mr. Herman reports that the total number of hours expended on this matter by his firm from May 1, 2017 to September 28, 2018 is 114.90 hours, billed at a total amount of $34,826.00, broken down as 30.60 hours at $385.00 per hour by Jonathan M. Herman, Managing Member, for a total of $11,781.00; 80.20 hours at $275.00 per hour by Charles W. Hill, Associate, for a total of $22,055.00; and 3.60 hours at $275.00 per hour by Mitchell M. Hasenkampf, Associate, for a total of $990.00 (not $1,127.50). See id. at 3.
And Mr. Herman declares that, "[t]hrough [his] experience as an attorney in litigation matters such as this one, [he is] familiar with the reasonable and necessary work required by attorneys at various experience levels to succeed in defending cases such as this," is "familiar with the customary and reasonable attorneys' fees charged in this market for cases of this type," and is "familiar with the work that has been done on this matter" and that, "[b]ased on [his] personal knowledge of the work done in this case, [he has] an opinion as to what reasonable attorneys' fees would be in this matter," which is that "reasonable attorneys' fees to serve as lead counsel for BCBSLA in this lawsuit from May 1, 2017 to September 28, 2018, total $34,963.50." Id. at 3-4. According to Mr. Herman, "[t]his amount is more than reasonable under the" Johnson factors." Id. at 4.
The billing records that Mr. Herman submitted reflect the work that BCBSLA's attorneys performed and include a narrative description — with redactions apparently to protect attorney work product or attorney-client privilege — of the work done and the number of hours that it took to complete the work. "Redaction of billing records is acceptable so long as the court has sufficient information to determine that the hours related to those entries were reasonably expended." Brown v. ASEÀ Brown Boveria, Inc., No. 3:14-cv-37-CWR-LRA, 2018 WL 283844, at *3 (S.D. Miss. Jan. 3, 2018); accord Randolph v. Dimension Films, 634 F.Supp.2d 779, 800 (S.D. Tex. 2009) ("Redaction of billing records is acceptable as long as the court has sufficient information to form an opinion on the reasonableness of the fees.").
The Court has carefully reviewed these records and finds that the redactions did not always permit the Court to make that determination. More specifically, the entries for Mr. Herman on May 15, 18, 19, 22, 26, and 31, 2017, June 5 and 9, 2017, October 4 and 5, 2017, March 29, 2018, July 27, 2018, August 17 and 21, 2018, and September 24 and 27, 2018 do not identify the subject of the attorneys' communications or other tasks and therefore fail to provide sufficient information to assess whether the time expended was reasonable in representing BCBSLA in this action. Accord Monarch Invs., LLC v. Aurrecoechea, Cause No. A-14-CA-01019-SS, 2017 WL 1034647, at *4 (W.D. Tex. Mar. 16, 2017).
"Redacted entries must be excluded if they do not provide sufficient information to classify and evaluate the activities and hours expended." Randolph, 634 F. Supp. 2d at 800.
Under the circumstances, the Court determines that a reduction of 8.70 hours at $385 per hour, totaling $3,349,50, is appropriate.
The Court otherwise finds that the remaining 106.20 total hours for which BCBSLA seeks to recover its fees were reasonable and necessary to successfully representing BCBSLA in this case and are not excessive, duplicative, or inadequately documented and therefore were reasonably expended for the tasks for which BCBSLA should be awarded its attorneys' fees under Section 1132(g)(1).
The Court finds that the claimed rates of $385.00 and $275.00 per hour are reasonable and within the market rate for attorneys handling this type of litigation in the Dallas area of these attorneys' experience level.
The Court therefore finds the appropriate lodestar here to be calculated as 21.90 hours at $385.00 per hour by Jonathan M. Herman, plus 80.20 hours at $275.00 per hour by Charles W. Hill, plus 3.60 hours at $275.00 per hour by Mitchell M. Hasenkampf, for a total of $31,476.50.
The Court has considered the Johnson factors but notes that the lodestar is presumed to be reasonable and should only be modified in exceptional cases.
Here, BCBSLA does not seek an enhancement of its attorneys' fees, and the Court finds that there are no other exceptional circumstances.
But the Court does not find that the $45.14 in expenses has been adequately explained or supported, and the Court will not award those costs.
For the reasons and to the extent explained above, the Court GRANTS in part and DENIES in part BCBSLA's Motion for Attorneys' Fees [Dkt. No. 63].
The Court ORDERS that Plaintiff Richard H. Weiner, DPM, PA must pay Defendant Blue Cross and Blue Shield of Louisiana its reasonable attorneys' fees under 29 U.S.C. § 1132(g)(1) in the amount of $31,476.50.
SO ORDERED.
