Bosley v. Metropolitan Life Insurance Company

Filing 90

ORDER GRANTING 77 MOTION FOR ATTORNEY'S FEES by Hon. William Alsup. (whalc2, COURT STAFF) (Filed on 9/14/2017)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 ROBERT BOSLEY, 11 For the Northern District of California United States District Court 10 12 13 No. C 16-00139 WHA Plaintiff, v. 14 15 ORDER GRANTING MOTION FOR ATTORNEY’S FEES METROPOLITAN LIFE INSURANCE COMPANY, Defendant. / 16 17 18 19 20 21 INTRODUCTION Plaintiff in this ERISA action moves for attorney’s fees, costs, and interest following judgment in his favor. The motion is GRANTED. STATEMENT The factual and procedural background of this action has been set forth in detail in prior 22 orders (Dkt. Nos. 38, 54, 69) and need not be repeated here. In brief, plaintiff Robert Bosley 23 brought this action against defendant Metropolitan Life Insurance Company (“MetLife”) to 24 recover long-term disability benefits under the Employee Retirement Income Security Act of 25 1974. After prior orders denied both sides’ cross-motions for summary judgment, this action 26 proceeded to a bench trial on the administrative record (Dkt. Nos. 38, 54). An order after the 27 bench trial found that MetLife owed Bosley some, but not all, of the benefits sought (Dkt. No. 28 69). Judgment was entered accordingly (Dkt. No. 74). Bosley now moves for attorney’s fees, costs, and interest (Dkt. No. 77). This order follows full briefing and oral argument. 1 ANALYSIS 2 1. ENTITLEMENT TO ATTORNEY’S FEES. 3 Section 1132(g)(1) of Title 29 of the United States Code provides, “the court in its 4 discretion may allow a reasonable attorney’s fee and costs of action to either party.” The 5 Supreme Court has held that “a fee claimant need not be a ‘prevailing party’” but “must show 6 ‘some degree of success on the merits’ before a court may award attorney’s fees under [Section] 7 1132(g)(1).” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252, 255 (2010). Our 8 court of appeals has further explained that, “absent special circumstances, a prevailing ERISA 9 employee plaintiff should ordinarily receive attorney’s fees from the defendant.” Smith v. 11 For the Northern District of California United States District Court 10 CMTA-IAM Pension Trust, 746 F.2d 587, 590 (9th Cir. 1984). In our circuit, a court exercising its discretion under Section 1132(g)(1) should consider, 12 among other things, “(1) the degree of the opposing parties’ culpability or bad faith; (2) the 13 ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against 14 the opposing parties would deter others from acting under similar circumstances; (4) whether 15 the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan 16 or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the 17 parties’ positions.” Hummell v. S. E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980). 18 Here, Bosley undoubtedly achieved “some degree of success on the merits.” MetLife 19 “disputes that fees should be awarded at all, based on . . . the fact that [Bosley] did not 20 completely prevail in this action” (Dkt. No. 86 at 1), but Bosley does not need to “completely 21 prevail” to establish eligibility for attorney’s fees under Section 1132(g)(1). See Hardt, 560 22 U.S. at 252. This order therefore turns to the Hummell factors. 23 24 A. Culpability or Bad Faith. The record does not support a finding of culpability or bad faith against either side. 25 Indeed, as detailed in the order setting forth findings of fact and conclusions of law after the 26 bench trial, this action presented a very close question as to whether Bosley actually satisfied 27 the definition of disability as required to receive long-term disability benefits under MetLife’s 28 policy (see Dkt. No. 69 at 10–15). Contrary to Bosley’s contention, the mere fact that MetLife 2 1 partly erred in denying him benefits does not constitute “an adequate basis upon which to find 2 ‘culpability,’ if not ‘bad faith’” (see Dkt. No. 77 at 3–4). This factor is neutral. 3 4 5 B. MetLife concedes it has the financial resources to satisfy an award of attorney’s fees (Dkt. No. 86 at 4). This factor weighs in favor of granting attorney’s fees. 6 7 Ability to Pay. C. Deterrence. Since this action presented a very close question on the merits, an award of attorney’s circumstances. Bosley claims he “can only hope that an award of attorney’s fees and costs in 10 this case will deter defendant MetLife and other insurance carriers from similar conduct” but 11 For the Northern District of California fees herein would likely have little to no deterrence effect on others even under similar 9 United States District Court 8 provides no plausible basis for that hope (Dkt. No. 77 at 4–5). This factor is neutral. 12 13 D. Benefitting Others. For the same reason, it is unlikely that, as Bosley suggests, “similarly situated ERISA 14 plaintiffs in the future . . . will be able to rely upon this Court’s analysis to urge MetLife to 15 consider their subjective complaints in its analysis of their claims” (Dkt. No. 77 at 5). Bosley 16 does not and cannot contend that he brought this action to benefit any other individuals or to 17 resolve a significant legal question regarding ERISA. This factor is neutral. 18 19 E. Relative Merits. As stated, although Bosley recovered some of the benefits sought herein, this action 20 presented a very close call on the merits. On balance, this factor, and the Hummell factors as a 21 whole, weigh slightly on favor of granting attorney’s fees. Keeping in mind the admonition of 22 our court of appeals that “a prevailing ERISA employee plaintiff should ordinarily receive 23 attorney’s fees from the defendant,” this order therefore concludes that Bosley is entitled to 24 attorney’s fees. Smith, 746 F.2d at 590. AMOUNT OF ATTORNEY’S FEES. 25 2. 26 “To calculate attorney’s fees awarded under [Section] 1132(g)(1), district courts utilize a 27 two-step hybrid lodestar/multiplier approach.” Welch v. Metropolitan Life Ins. Co., 480 F.3d 28 942, 945 (9th Cir. 2007). First, the court determines the appropriate lodestar amount by 3 1 “multiplying the number of hours reasonably expended on the litigation by a reasonable hourly 2 rate.” In doing so, the district court may exclude “excessive, redundant, or otherwise 3 unnecessary” hours and must consider “the experience, skill, and reputation of the attorney 4 requesting fees.” Id. at 945–46 (quotations and citations omitted). Second, “in rare and 5 exceptional cases, the district court may adjust the lodestar upward or downward using a 6 multiplier based on facts not subsumed in the initial lodestar calculation.” Id. at 946 (citation 7 omitted). “The party seeking fees bears the burden of documenting the hours expended in the 8 litigation and must submit evidence supporting those hours and the rates claimed.” Id. at 9 945–46 (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Here, Bosley’s counsel claims he necessarily expended 166.9 hours in prosecuting this 11 For the Northern District of California United States District Court 10 action and requests “the prevailing market rate of $650.00 per hour” (Dkt. No. 77 at 5). 12 Counsel provided detailed time records documenting the time expended on specific tasks during 13 this litigation (Dkt. No. 78-1). Counsel also provided the declarations of three “experienced 14 ERISA litigators in the San Francisco Bay Area” and identified several recent decisions from 15 our district awarding attorney’s fees under Section 1132(g)(1), all of which corroborate the 16 reasonableness of his requested hourly rate (see Dkt. Nos. 78-2–78-8).1 17 This order concludes the hourly rate of $650 per hour requested by Bosley’s counsel is 18 reasonable. The hours expended on this litigation are also, for the most part, reasonable under 19 these circumstances and amply supported by counsel’s detailed time records, except that this 20 order excludes three hours for estimated travel time (see Dkt. No. 78-1 at 5, 9, 12) and five 21 hours for a request concerning the amount of benefits due that counsel drafted but never filed 22 (see id. at 13 & n.1). The appropriate lodestar amount to award is therefore 158.9 hours 23 multiplied by $650 per hour, or $103,285, plus an additional $1,820 for Bosley’s reply brief in 24 support of this motion for attorney’s fees (less estimated travel time for the very brief hearing) 25 (see Dkt. No. 88 at 4). Counsel does not seek any multiplier of the lodestar amount, and no 26 multiplier is warranted here. 27 1 28 MetLife’s only response is to assert, without argument or authority, that the hours expended “are excessive and unreasonable” and counsel’s “hourly rates sought are unreasonable” (see Dkt. No. 86 at 1–2). This assertion falls well short of rebutting Bosley’s counsel’s well-documented request. 4 1 2. INTEREST. 2 “A district court may award prejudgment interest on an award of ERISA benefits at its 3 discretion.” Blankenship v. Liberty Life Assurance Co. of Boston, 486 F.3d 620, 627–28 (9th 4 Cir. 2007) (citations omitted). “Prejudgment interest is an element of compensation, not a 5 penalty.” Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974, 988 (9th Cir. 2001). “Whether 6 interest will be awarded is a question of fairness . . . to be answered by balancing the equities.” 7 Shaw v. Int’l Ass’n of Machinists & Aerospace Workers Pension Plan, 750 F.2d 1458, 1465 8 (9th Cir. 1985) (citations omitted). Generally, the interest rate prescribed for post-judgment 9 interest under Section 1961 of Title 28 of the United States Code is appropriate for fixing the rate of pre-judgment interest unless the district court finds, on substantial evidence, that the 11 For the Northern District of California United States District Court 10 equities of a particular case require a different rate. Blankenship, 486 F.3d at 628. 12 Bosley seeks prejudgment interest at the rate of ten percent per annum to “help 13 compensate [him] for the [losses] he incurred as a result of MetLife’s wrongful denial and 14 withholding of his long term disability benefits for over three years” (Dkt. No. 77 at 5–6). He 15 had previously submitted a declaration detailing how MetLife’s denial of his claim contributed 16 to financial difficulties that ultimately led him to move to Missouri for more affordable housing 17 (see Dkt. No. 40). Under these circumstances, he contends, “[t]oday’s artificially low treasury 18 yield rate is simply not enough” to compensate for his losses (Dkt. No. 77 at 6). MetLife’s only 19 response is that “[a]ny inadequacy of the statutory rate is an issue for Congress, not for this 20 Court” (Dkt. No. 86 at 6). This argument is correct as far as it goes, but misses the point. Any 21 general inadequacy inherent in the statutory rate remains an issue for Congress, but whether that 22 rate provides inadequate compensation given the equities of this particular case remains a 23 question for this Court. See Blankenship, 486 F.3d at 628.2 Taking into account the balance of equities and the compensatory nature of prejudgment 24 25 interest, this order concludes that an award of prejudgment interest at the rate of ten percent, 26 compounded annually, is appropriate here. 27 28 2 In its opposition brief, MetLife requests that any award of prejudgment interest be compounded annually (Dkt. No. 86 at 6). Bosley does not oppose this request in his reply brief (Dkt. No. 88). 5 1 2 CONCLUSION For the foregoing reasons, plaintiff’s motion for attorney’s fees, costs, and interest is 3 GRANTED. Plaintiff is hereby awarded $105,105 in attorney’s fees and prejudgment interest at 4 the rate of TEN PERCENT, compounded annually. 5 6 IT IS SO ORDERED. 7 8 Dated: September 14, 2017. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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