Resilient Floor Covering Pension Fund et al v. M&M Installation, Inc. et al
Filing
163
ORDER by Magistrate Judge Bernard Zimmerman denying 131 Motion for Attorney Fees; finding as moot 142 Motion for Attorney Fees; granting in part and denying in part 155 Motion for Attorney Fees (rmm2, COURT STAFF) (Filed on 5/17/2012)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
NORTHERN DISTRICT OF CALIFORNIA
10
11
RESILIENT FLOOR COVERING
PENSION FUND, et al.,
12
Plaintiff(s),
13
v.
14
15
M&M INSTALLATION, INC., et
al,
16
Defendant(s).
)
)
)
)
)
)
)
)
)
)
)
)
No. C08-5561 BZ
ORDER ON MOTIONS FOR
ATTORNEYS’ FEES AND MOTION
TO AMEND JUDGMENT
17
18
Before the court are two motions for attorneys’ fees, one
19
submitted by Plaintiffs and the other by Defendants, as well
20
as Defendants’ motion to amend the judgment.
21
set forth below, Defendants’ motions are DENIED and
22
Plaintiffs’ motion is GRANTED IN PART.
For the reasons
23
Defendants’ Motion for Attorneys’ Fees
24
Defendants move for attorneys’ fees under 29 U.S.C.
25
section 1451(e).1
That section commits the award of
26
1
27
28
This section reads: “In any action under this
section, the court may award all or a portion of the costs and
expenses incurred in connection with such action, including
reasonable attorney’s fees, to the prevailing party.”
1
1
attorneys’ fees and costs to the discretion of the court.2
2
The Ninth Circuit has set forth five factors to guide the
3
district court’s exercise of discretion:
4
the opposing parties’ culpability or bad faith; (2) the
5
ability of the opposing parties to satisfy an award of fees;
6
(3) whether an award of fees against the opposing parties
7
would deter others from acting under similar circumstances;
8
(4) whether the parties requesting fees sought to benefit all
9
participants and beneficiaries of an ERISA plan or to resolve
(1) the degree of
10
a significant legal question regarding ERISA; and (5) the
11
relative merits of the parties’ positions.
12
Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980); see also
13
Cuyamaca Meats, Inc. v. San Diego & Imperial Counties
14
Butchers’ & Food Employers’ Pension Trust Fund, 827 F.2d 491,
15
500 (9th Cir. 1987).
16
Hummell v. S. E.
Considering these factors, I decline to award Defendants’
17
attorneys’ fees in this case.
18
acted culpably or that their positions must have appeared
19
meritless to them or to their counsel when viewed
20
prospectively rather than with the benefit of hindsight.
21
pointed out in my order on the parties’ cross-motions for
22
summary judgment, the Ninth Circuit invited Plaintiffs, and
I cannot say that Plaintiffs
As I
23
2
24
25
26
27
28
Awarding fees under this section is mandatory where a
plan brings a successful action to collect unpaid employer
withdrawal liabilities. Under ERISA, the award of attorneys’
fees to a pension plan is mandatory in all actions to collect
delinquent contributions. 29 U.S.C. § 1132(g)(2). The Ninth
Circuit has held that this mandatory attorneys’ fees provision
applies in all actions to collect delinquent contributions owed
under section 1145, including actions to collect unpaid
employer withdrawal liabilities. Lads Trucking Co. v. Board of
Trustees, 777 F.2d 1371, 1374 (9th Cir. 1985).
2
1
“encouraged” me, to address the issues of veil piercing and to
2
determine whether Simas Floor was liable to Plaintiffs under
3
section 1392(c) of the MPPAA for engaging in a transaction, a
4
principal purpose of which was to “evade or avoid” withdrawal
5
liability.
6
Plaintiffs pursued these claims in bad faith.
7
Defendants’ contention that there was “not a shred of evidence
8
to support a veil piercing claim,” is not true.
9
strongly argued that M & M was undercapitalized, a factor
(See Docket No. 124.)
I cannot therefore say that
Moreover,
Plaintiffs
10
which often supports piercing a corporate veil.
11
did not prevail on this issues; I merely concluded that there
12
were disputed issues of fact that could not be resolved on
13
summary judgment.
14
pursue a veil piercing claim based on the alleged
15
undercapitalization of M & M by its parent company, whose
16
shareholders were identical.
17
Defendants
It was not unreasonable for Plaintiffs to
In addition, Plaintiffs’ counsel has submitted a
18
declaration stating that the Pension Fund has been certified
19
as “in critical status” by its actuary since March 2010.
20
I am therefore not persuaded that Plaintiffs could satisfy an
21
award of attorneys’ fees.
22
benefit for all plan beneficiaries, a factor that favors
23
Plaintiffs.
24
Finally, the issue related to a
Moreover, even if some Hummell factors favored
25
Defendants, Defendants would still not be entitled to
26
attorneys’ fees because no judgment has been entered in their
27
favor as a “prevailing party” under section 1451.
28
argue that since Plaintiffs lost on their veil piercing claim
3
Defendants
1
against the individual Defendants, judgment should be entered
2
in their favor and they should be entitled to fees as the
3
prevailing party.
4
issue, which is to compel the payment of the withdrawal
5
liability, and are therefore the prevailing party.
6
Trucking, 777 F.2d at 1375 (“[Pension Trust Fund] is the
7
prevailing party; it won the ultimate issue; that it did not
8
prevail on each and every sub-issue is not grounds for a
9
piecemeal fees award.”).
I disagree.
Plaintiffs won the ultimate
See Lads
Accordingly, Defendants’ motion for
10
attorneys’ fees and their corresponding motion to amend the
11
judgment are DENIED.
12
Plaintiffs’ Motion for Attorneys’ Fees & Costs
13
Where a plan successfully brings an action to collect
14
unpaid employer withdrawal liabilities, an award of reasonable
15
attorney’s fees and costs is mandatory.3
16
at 1373-75.
17
full amount of withdrawal liability owed by Defendants, and
18
are therefore entitled to reasonable attorneys’ fees.
Lads Trucking, 777
Plaintiffs sought and received a judgment for the
19
“The most useful starting point for determining the
20
amount of a reasonable fee is the number of hours reasonably
21
expended on the litigation multiplied by a reasonable hourly
22
3
23
24
25
26
27
Neither Plaintiffs nor Defendants address the
mandatory nature of attorneys’ fees in withdrawal liability
actions where the plan is successful. In light of the
mandatory nature of an award of attorneys’ fees in withdrawal
liability actions, I will not address the factors set forth in
Cuyamaca Meats, 827 F.2d at 500, as the parties have done. See
also Operating Engineers’ Pension Trust Fund v. Clark’s Welding
& Mach., Case No. 09-0044, 2010 U.S. Dist. LEXIS 50676, 2010 WL
1729475, at *5 (N.D. Cal. Apr. 27, 2010) (“When the Court
awards withdrawal liability, an award of reasonable attorneys’
fees is mandatory.”)
28
4
1
rate.”
2
district court should also exclude from this initial fee
3
calculation hours that were not ‘reasonably expended’” such as
4
“fee request hours that are excessive, redundant, or otherwise
5
unnecessary. . . .”
6
the Supreme Court:
7
8
9
10
11
12
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).
Id. at 434.
“The
As recently emphasized by
[T]rial courts need not, and indeed should not,
become green-eyeshade accountants. The essential
goal in shifting fees (to either party) is to do
rough justice, not to achieve auditing perfection.
So trial courts may take into account their overall
sense of a suit, and may use estimates in
calculating and allocating an attorney’s time.
Fox v. Vice, 131 S. Ct. 2205, 2216 (2011).
With respect to the hourly rates sought by Plaintiffs, I
13
find that, with the exception noted below, the rates are
14
reasonable.
15
time and $150 per hour for paralegal time.
16
submitted evidence showing that these attorney rates are in
17
line with those prevailing in the marketplace.
18
Clark’s Welding & Mach., 2010 U.S. Dist. LEXIS 50676, 2010 WL
19
1729475 at *15-16 (attorney rates of $185 per hour and $255
20
per hour and paralegals at $110 per hour found reasonable in
21
withdrawal liability action); Board of Trustees of the
22
Boilermaker Vacation Trust v. Skelly, Inc., 389 F. Supp. 2d
23
1222, 1227-28 (N.D. Cal. 2005) (attorney rates of $210 per
24
hour and $345 per hour found reasonable in delinquent
25
contribution action).
26
hourly rates sought by Plaintiffs, but they do dispute the
27
reasonableness of the paralegal hourly rates, arguing that an
28
hourly rate of $115 is more in line with community standards.
Plaintiffs request $250 per hour for attorney
Plaintiffs
See, e.g.,
Defendants do not dispute the attorney
5
1
(Def.’s Opp. Br. at 13.)
I agree with Defendants that an
2
hourly rate of $150 is on the higher end of the spectrum for
3
paralegal rates in this district.
4
N. Cal. Health & Welfare Trust Fund v. Alvarado, Case No.
5
09-02552, 2011 U.S. Dist. LEXIS 39133, 2011 WL 1361572, at
6
*16-17 (N.D. Cal. Apr. 11, 2011) (awarding $110 and $115
7
hourly rates for paralegals in action for unpaid
8
contributions); Carpenters Pension Trust Fund for N. Cal. v.
9
Lindquist, Case No. 10-3386, 2011 U.S. Dist. LEXIS 111731,
See, e.g., Dist. Council 16
10
2011 WL 4543079 (N.D. Cal. Sept. 29, 2011) (same).
There is
11
support for awarding paralegals an hourly rate as high as
12
$150, particularly where evidence is submitted that the
13
paralegal is performing tasks akin to those of an attorney
14
(see, for example, White v. Coblentz, Patch, Duffy & Bass LLP
15
Long Term Disability Ins. Plan, 2011 U.S. Dist. LEXIS 125657,
16
2011 WL 5183854 (N.D. Cal. Oct. 31, 2011) and the cases cited
17
therein), but Plaintiffs have submitted virtually no evidence
18
to demonstrate that the paralegals who performed work in this
19
action should be billed out at rates on the higher end of the
20
spectrum.
21
paralegals who worked on this matter are their names and how
22
long they have worked at Plaintiffs’ counsels’ law group.
23
(See Corrected Declaration of Katherine McDonough (“McDonough
24
Decl.”) at ¶ 1.)
25
types of tasks performed, the paralegals’ experience,
26
training, and previous rates billed and received, I am not
27
inclined to award such a high rate.
28
requested rate to $125 per hour.
The only information provided about the two
Without additional information regarding the
6
I therefore reduce the
Otherwise, I find the
1
requested rates are reasonable.
2
Regarding the number of hours billed, Plaintiffs’ counsel
3
have submitted billing records demonstrating that they spent
4
927.70 hours litigating this case.4
5
spent litigating this action before and after the appeal.
6
(McDonough Decl. ¶¶ 6-8.)
7
itemized accounting of the number of hours spent on each task
8
performed by counsel for which they request reimbursement.
9
(Id.)
These hours comprise time
Plaintiffs have provided an
Defendants argue that Plaintiffs should not be
10
permitted to recover fees for work performed in the pre-appeal
11
phase of this action because Plaintiffs previously requested,
12
and were denied, those fees on account of failing to comply
13
with the meet and confer requirements of the Local Rules.
14
(See Docket No. 54.)
15
did not appeal the order denying their fees, they have waived
16
the right to recover those fees.
17
Plaintiffs have waived their right to recover fees and costs
18
for the pre-appeal phase of this action.
19
entitled to recover those fees it would permit them to revive
20
their original motion for attorneys’ fees despite the fact it
21
was denied on account of their failure to comply with the
22
relevant Local Rules.
23
original summary judgment order, Plaintiffs would have never
24
been given the opportunity to seek to collect these fees
25
(unless they had appealed the denial, which they did not do),
Defendants argue that since Plaintiffs
I agree with Defendants that
If Plaintiffs were
Had Defendants not appealed the
26
4
27
28
This figure incorporates a voluntary reduction of 32
hours for worked performed on the second motion for summary
judgment related to Plaintiffs’ unsuccessful claim for veil
piercing.
7
1
and it is only by virtue of the action having been remanded
2
that Plaintiffs are now able to even attempt to collect these
3
fees.
4
waived a right to fees and did not appeal from that ruling to
5
use an adverse ruling on the merits of an appeal to revive its
6
right to fees.
7
entitled to recover fees or costs for work performed during
8
the pre-appeal phase of this action.
9
It is too much of a bootstrap to permit a party who
Accordingly, I find that Plaintiffs are not
That leaves 256.10 hours of potentially reimbursable
10
time.5
11
spent both drafting and preparing for oral argument on the
12
second summary judgment motion.6
13
time spent on the second summary judgment motion is excessive
14
given that Plaintiffs’ attorneys had already researched and
15
briefed a number of the issues in the parties’ motions.
Of this amount, Plaintiffs seek 204 hours for time
Defendants argue that the
16
17
18
19
5
This number is derived from Plaintiffs’ billing
records, attached as Exhibit 1 to the McDonough Declaration.
The first time entry in these records for the post-appeal phase
of this action is on 1/26/2011. This order uses that billing
entry as the starting point for determining the total number of
post-appeal hours.
20
6
21
22
23
24
25
26
27
28
In their first motion for summary judgment,
Plaintiffs sought reimbursement for 176.69 billable hours
related to work performed on the cross-motions for summary
judgment. (Docket No. 50.) Plaintiffs now seek reimbursement
for a total of 373.50 billable hours for work performed
relating to both rounds of the cross-motions for summary
judgment. The difference between these two figures, rounded to
the nearest hundredth, is 196.80. In their reply brief,
however, Plaintiffs’ counsel claim to have worked 213.50 hours
on the second round of summary judgment. This inconsistency is
not addressed by Plaintiffs. I reviewed the billing records
and added the hours from each time entry reflecting work
performed on the second round of summary judgment briefing,
which came to 204 hours. Given the inconsistencies in the
briefs, I have chosen to use the 204 hour figure that is
supported by the billing records.
8
1
Defendants also highlight the similarity in the statements of
2
facts between Plaintiffs’ first summary judgment motion and
3
their second motion, pointing out that the statement of facts
4
comprised 11 of the 33 pages in the brief.
5
counsel asserts that the second summary judgment brief
6
contained “expanded and revised” facts that shed light on the
7
history of Simas Floor and how M & M was formed, and also
8
included additional research on the alter ego doctrine.
Plaintiffs’
9
That there is overlap in the legal research and briefing
10
does not mean that the time spent in research and re-drafting
11
was entirely unnecessary or duplicative.
12
extended over many years, and it is not unreasonable for
13
Plaintiffs’ counsel to spend time conducting legal research to
14
ensure that Plaintiffs’ arguments were consistent with the
15
present status of the law.
16
534 F.3d 1106, 1112 (9th Cir. 2008) (“When a case goes on for
17
many years, a lot of legal work product will grow stale; a
18
competent lawyer won’t rely entirely on last year’s, or even
19
last month’s, research: Cases are decided; statutes are
20
enacted; regulations are promulgated and amended. A lawyer
21
also needs to get up to speed with the research previously
22
performed. All this is duplication, of course, but it’s
23
necessary duplication; it is inherent in the process of
24
litigating over time.”) (emphasis in original).
25
also presented some novel issues regarding the alter ego
26
doctrine, which made the legal analysis inherently more
27
complex, particularly given that there was little authority
28
applying the alter ego doctrine to a factual scenario similar
This litigation has
See Moreno v. City of Sacramento,
9
This case
1
to the one presented in this dispute.
Indeed, a great deal of
2
the analysis turned on the historical application of this
3
doctrine in the context of traditional labor disputes, not
4
under the MPPAA.
Nevertheless, 204 hours – which amounts to approximately
5
6
5 full-time workweeks – is on the higher end of what I would
7
expect Plaintiffs’ counsel to spend on the summary judgment
8
motion presented in this action, particularly since some of
9
the issues had already gone through one round of briefing.
10
is somewhat difficult to tell from the billing records what
11
precisely consumed so much of Plaintiffs’ counsels’ time, as
12
many of the records simply state “prepare Summary Judgment
13
Motion” or “further Prepare Summary Judgment Motion.”
14
204 hours is on the higher end of the time that I would have
15
expected counsel to spend on this motion, and in light of the
16
vagueness of the billing records, I find that a moderate
17
reduction in the number of hours sought is warranted.
18
therefore reduce the hours requested for work relating to the
19
second round of summary judgment by ten percent, for a total
20
of 183.6 hours.7
Since
I will
Finally, Defendants argue that Plaintiffs should not be
21
22
entitled to recover time spent on the July 2011 settlement
23
conference because, in addition to being unreasonable and
24
excessive, Plaintiffs misrepresented their willingness to
25
settle their claims, which resulted in the settlement
26
27
28
It
7
Based on the billing records, this will amount to
37.44 reimbursable paralegal hours and 146.16 reimbursable
attorney hours.
10
1
conference being an “utter waste of time.”
2
at p.13.)
3
to the July 2011 settlement and am not convinced that
4
Plaintiffs’ hours are excessive.
5
reduce these hours, particularly in light of the high
6
incentive placed on encouraging parties to meaningfully engage
7
in settlement discussions.8
I have reviewed Plaintiffs’ billing entries related
I therefore decline to
Plaintiffs have also submitted billing records showing
8
9
(Def.’s Opp. Br.
that in the post-appeal phase of this action they incurred
10
$113.25 in costs for delivering pleadings and other documents
11
to the court.
12
Plaintiffs are entitled to recover these delivery costs as
13
part of their reasonable attorneys’ fees.
14
Construction Industry and Laborers Health and Welfare Trust v.
15
Redland Ins. Co., 460 F.3d 1253, 1257 (9th Cir. 2006).
16
Plaintiffs also seek to recover costs relating to computerized
17
legal research.
18
computerized research may be recovered if separate billing for
19
such expenses is “the prevailing practice in the local
20
community.”
21
Welfare Trust v. Redland Ins. Co., 460 F.3d 1253, 1258-59 (9th
22
Cir. 2006).
23
and the challenges to that evidence raised by Defendants, I
24
find that Plaintiffs have failed to meet their burden to show
25
that the recovery of computerized legal research costs is the
(McDonough Decl. at ¶ 10, Exhs. 2-3.)
Trustees of the
In this circuit, reasonable charges for
Trs. of the Constr. Indus. & Laborers Health &
Based on the evidence submitted by Plaintiffs,
26
27
28
8
I also agree with Plaintiffs’ counsel that it is not
proper for me to delve into the details of what happened during
the settlement conference under the Local ADR Rules.
11
1
prevailing practice in this district.
While Ms. McDonough’s
2
declaration states that “[i]t is the prevailing practice in
3
the Bay Area to bill computerized research charges to the
4
client,” no foundation is provided for this conclusory
5
assertion. (McDonough Decl. at ¶ 11.)
6
evidence – unchallenged by Plaintiffs – that it is in fact not
7
the prevailing practice in this district to charge clients for
8
computerized legal research, and that most firms pay a flat
9
monthly rate for these services in lieu of charging clients
Defendants provided
10
separately on a “per search basis.”
11
Davenport at ¶¶ 4-6.)
12
research costs incurred in this case were hourly charges that
13
were in fact billed to the Pension Fund.
14
Katherine McDonough in Support of Reply at ¶ 19.)
15
may be the practice of Plaintiffs’ counsels’ firm, Plaintiffs
16
failed to counter Defendants’ evidence that this is not “the
17
prevailing practice” of firms in this district. I therefore
18
decline to award Plaintiffs these costs.
(Declaration of Stephen
Ms. McDonough states that the legal
(Declaration of
While this
19
Conclusion
20
For the reasons set forth above, IT IS SO ORDERED that
21
Plaintiffs are awarded $53,900.00.
22
attorney hours at a rate of $250 ($48,875) and 40.2 paralegal
23
hours at a rate of $125 ($5,025).
24
$113.25 in costs.
25
Dated: May 16, 2012
26
This sum comprises 195.5
Plaintiffs are also awarded
Bernard Zimmerman
United States Magistrate Judge
27
28
G:\BZALL\-BZCASES\RESILIENT FLOOR COVERING PENSION\ORDER ON SECOND MOT FOR
ATTYS FEES v.3.wpd
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?