Black et al v. Greater Bay Bancorp Executive Supplemental Compensation Benefits Plan et al

Filing 99

ORDER DENYING DEFENDANTS' MOTION FOR ATTORNEYS' FEES by Judge Elizabeth D. Laporte denying 88 Motion for Attorney Fees. (tlS, COURT STAFF) (Filed on 3/27/2018)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

SUSAN K BLACK, et al.,
Plaintiffs,

8

United States District Court
Northern District of California

11

ORDER DENYING DEFENDANTS’
MOTION FOR ATTORNEYS' FEES

v.

9
10

Case No.16-cv-00486-EDL

GREATER BAY BANCORP EXECUTIVE
SUPPLEMENTAL COMPENSATION
BENEFITS PLAN, et al.,

Re: Dkt. No. 88

Defendants.

12

Before the Court is Defendant Greater Bay Bancorp Executive Supplemental

13
14

Compensation Benefits Plan and Wells Fargo Bank, N.A. (together, “Defendants”) motion for

15

attorneys’ fees in the amount of $363,876.50 under the Employee Retirement Income Security Act

16

(“ERISA”), 29 U.S.C. § 1001 et seq. For the reasons discussed below, the Court DENIES the

17

motion.

18

I.

19

BACKGROUND
The Court’s previous order granting Defendants’ motion for summary judgment set forth

20

the full factual and procedural background of this case, so this section only contains the

21

background relevant to this motion. Plaintiffs brought this case against Defendants alleging that,

22

pursuant to the terms of a Supplemental Executive Retirement Plan and related documents, they

23

were entitled to supplemental retirement benefits payments funded by the employer annually

24

through contributions to Secular Trusts to purchase life insurance policies, as well as a life

25

insurance death benefit payable to Plaintiffs’ estate. Defendants disagreed with Plaintiffs’

26

interpretation of the Plan documents, arguing that there was no death benefit. Plaintiffs sought

27

approximately $15 million in additional contributions to their Secular Trusts to pay for the

28

alleged death benefit.

1

The parties filed cross motions for summary judgment on Plaintiffs’ claims under 29

2

U.S.C. § 1132(a)(1)(B). On January 23, 2018, this Court denied Plaintiffs’ motion, granted

3

Defendants’ motion, and entered judgment for Defendants. Dkt. Nos. 86-87. Plaintiffs filed a

4

notice of appeal with the Ninth Circuit. Dkt. No. 95.
Defendants subsequently filed a motion for attorneys’ fees pursuant to 29 U.S.C. §

5
6

1132(g)(1) on February 6, 2018. Dkt. No. 88. Plaintiffs opposed the motion on February 20,

7

2018. Dkt. No. 92. Defendants filed their reply on February 27, 2018. Dkt. No. 97.

8

II.

LEGAL STANDARD
ERISA provides that “[i]n any action under this subchapter (other than an action described

10

in paragraph (2))1 by a participant, beneficiary, or fiduciary, the court in its discretion may allow a

11
United States District Court
Northern District of California

9

reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). As its terms

12

suggest, such awards are not limited to prevailing plaintiffs, but may be awarded to “either party.”

13

The Ninth Circuit has held that the court should not “‘favor[ ] one side or the other’” when

14

determining whether to award attorneys-fees in ERISA matters. Cline v. Indus. Maint. Eng’g &

15

Contracting Co., 200 F.3d 1223, 1236 (9th Cir. 2000) (quoting Estate of Shockley v. Alyeska

16

Pipeline Serv. Co., 130 F.3d 403, 408 (9th Cir. 1997); see also Honolulu Joint Apprenticeship &

17

Training Comm. of United Ass’n Local Union No. 675 v. Foster, 332 F.3d 1234, 1239 (9th Cir.

18

2003) (“we have gone to some lengths to make clear that the availability of fees is not limited to

19

participants and beneficiaries, and have also approved the award of fees or partial fees to

20

prevailing plans”).

21

To obtain an award under Section 1132(g)(1), “a fees claimant must show ‘some degree of

22

success on the merits’ before a court may award attorney’s fees.” Hardt v. Reliance Standard Life

23

Ins. Co., 560 U.S. 242, 255 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694

24

(1983)). The Supreme Court has defined “some degree of success on the merits” as follows:
A claimant does not satisfy that requirement by achieving “trivial
success on the merits” or a “purely procedural victor[y],” but does

25
26
27
28

1

Paragraph (2) of 29 U.S.C. § 1132(g) provides for a mandatory award of reasonable attorneys’
fees and costs in actions for the payment of delinquent contributions under 29 U.S.C. § 1145.
That section is not applicable to this case.
2

satisfy it if the court can fairly call the outcome of the litigation
some success on the merits without conducting a “lengthy inquir[y]
into the question whether a particular party’s success was
‘substantial’ or occurred on a ‘central issue.’”

1
2
3

Id. (quoting Ruckelshaus, 463 U.S. at 688 n.9).

4

Once it is established that a fees claimant has shown the requisite “degree of success,” the

5

court must analyze the five factors set forth in Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453

6

(9th Cir. 1980):
1. [T]he degree of the opposing party’s culpability or bad faith,
2. [T]he ability of the opposing party to satisfy an award of fees,
3. [W]hether an award of fees would deter others from acting in
similar circumstances,
4. [W]hether the party requesting fees sought to benefit all
participants and beneficiaries of an ERISA plan or to resolve a
significant legal question regarding ERISA, and
5. [T]he relative merits of the parties’ positions.

7
8
9
10

United States District Court
Northern District of California

11
12

Cline, 200 F.3d at 1235 (citing Hummell, 634 F.2d at 453). “No one of the Hummell factors,
however, is necessarily decisive, and some may not be pertinent in a given case.” Carpenters S.

13
Cal. Admin. Corp. v. Russell, 726 F.2d 1410, 1416 (9th Cir. 1984) (citation omitted). The factors
14

“reflect a balancing,” and the Court “need not find that each factor weighs in support of fees” in

15
order to grant an award. McElwaine v. U.S.W., Inc., 176 F.3d 1167, 1173 (9th Cir. 1999). While
16
17

these factors apply to both sides, they “very frequently suggest that attorney’s fees should not be
charged against ERISA plaintiffs.” Credit Managers Ass’n of S. Cal. v. Kennesaw Life & Acc.

18
Ins. Co., 25 F.3d 743, 749 (9th Cir. 1994) (internal quotation marks and citations omitted).
19
Finally, if the Court finds that an award of fees is appropriate in light of the Hummell
20
factors, the party seeking the fee award must show that its requested fees are reasonable. See
21

D’Emanuele v. Montgomery Ward & Co., Inc., 904 F.2d 1379, 1383 (9th Cir. 1990).

22
23

III.

DISCUSSION
The sole question on this motion is whether the Court should exercise its discretion to

24

award Defendants’ attorneys’ fees as the prevailing party in this case. Defendants seek a total

25
award of $363,876.50.
26
27

A.

Terms of the Compensation Agreements

The Court has already found that Plaintiffs were not owed a secured death benefit under
28
3

1

the terms of the applicable Compensation Agreements. Although ERISA permits a discretionary

2

award of attorneys’ fees, Defendants originally also noted that they are owed their legal fees under

3

the terms of the Compensation Agreements, which provide that:

4

In the event of any arbitration or litigation concerning any
controversy, claim or dispute between the parties hereto, arising out
of or relating to this Agreement or the breach hereof, or the
interpretation hereof, the prevailing party shall be entitled to
recover from the non-prevailing party reasonable expenses,
attorneys’ fees and costs incurred in connection therewith or in
the enforcement or collection of any judgment or award rendered
therein. The “prevailing party” means the party determined by the
arbitrator(s) or court, as the case may be, to have most nearly
prevailed, even if such party did not prevail in all matters, not
necessarily the one in whose favor a judgment is rendered.

5
6
7
8
9

Dkt. Nos. 76-1, 76-2, ¶ XII.E; Dkt. No. 76-3 ¶ XI.E (emphasis added). Defendants do not rest

11
United States District Court
Northern District of California

10

their request for attorneys’ fees on a contractual basis, however, as they state that they “are now

12

seeking to enforce this bargained-for attorneys’ fees provision, albeit through ERISA Section

13

502(g).” Mot. at 4. The terms of the Compensation Agreement are irrelevant because a plan

14

provision cannot alter ERISA’s statutory fee-shifting rule. See Heimeshoff v. Harford Life &

15

Acc. Ins. Co., __ U.S. __, 134 S. Ct. 604, 610 (2013). Therefore, the Court has disregarded this

16

provision of the Compensation Agreements in deciding this motion.

17

B.

18

Through motions to dismiss, Defendants whittled this case down to one claim for benefits

Prevailing Party Status

19

under Section 502(a)(1)(B).2 In the end, the Court granted summary judgment in Defendants’

20

favor. The parties do not dispute that Defendants are prevailing parties for purposes of an

21

attorneys’ fees award under ERISA.

22

C.

23

Defendant argues that each of the five Hummell factors weigh in favor of granting its

24

Hummell Factors

request for attorneys’ fees.

25

1.

Plaintiff’s Culpability or Bad Faith

Defendants do not suggest that Plaintiffs acted in bad faith in bringing this litigation, but

26
27
2

28

The operative complaint includes two claims for benefits under Section 502(a)(1)(B), but they
are duplicative of each other, so there was effectively only one claim left at summary judgment.
4

1

they do contend that “Plaintiff’s relentless pursuit of meritless claims is precisely the type of

2

culpable conduct that makes an award of fees appropriate here.” Mot. at 6 (citing Dublin Eye

3

Assocs., P.C. v. Mass. Mt. Life Ins. Co., 2014 WL 1217664, at *8 (E.D. Ky. Mar. 24, 2014)

4

(finding plaintiff’s culpability in wasting the court’s time with meritless claims justified a fee

5

award to defendant); Foley v. Bethlehem Steel Corp., 30 F. Supp. 2d 366, 368 (W.D.N.Y. 1998)

6

(“Although plaintiff did not demonstrate any extreme instances of bad faith, he did pursue this

7

meritless litigation in an almost haphazard fashion, changing legal theories and defendants for the

8

first several years of litigation, making an award of fees appropriate.”)).

9

Defendants base this argument about Plaintiffs’ “relentless pursuit of meritless claims” on
two grounds, which Defendants claim shows that Plaintiffs could not have reasonably believed

11
United States District Court
Northern District of California

10

that “they could prove an actionable ERISA claim,” citing Cline, 200 F.3d at 1236. First, they

12

argue that Plaintiffs twice made a claim for breach of fiduciary duty in successive complaints,

13

even though the Court explained that this type of claim was not viable on the alleged facts and

14

under Ninth Circuit law. See Dkt. Nos. 44 & 61 (dismissing Plaintiffs’ breach of fiduciary duty

15

claim because Defendants had no duty to Plaintiffs regarding assets in the Trusts that Plaintiffs

16

themselves controlled). Second, they contend that Plaintiffs continued pursuing their claim for

17

benefits even though the Court stated in its order granting dismissal of the first amended complaint

18

that it was skeptical that the Plan documents alone provided the benefits Plaintiffs sought. The

19

Court’s order explained that “[i]f the Compensation Agreement were the sole Plan document,

20

these provisions might foreclose the possibility that a guaranteed death benefits from the life

21

insurance policies were contemplated” and that “[t]hese terms of the Trust Agreement do tend to

22

support Defendants’ position that the annual contributions to the Trusts were intended only to fund

23

Plaintiffs’ supplemental benefits, and not to also fully fund life insurance policies to provide death

24

benefits.” Dkt. No. 44 at 11, 12. By continuing to press their claims under the Plan documents,

25

Defendants argue that Plaintiffs wasted everyone’s time and resources.

26

The Court’s comment at the pleading stage that it was not convinced Plaintiffs could make

27

out a winning claim under the Plan documents is not an adjudication on the merits or even

28

necessarily an indication that Plaintiffs lacked a colorable claim. As Plaintiffs point out, in ERISA
5

1

cases
the “culpability” of a losing plaintiff significantly differs from that
of a losing defendant. A losing defendant must have violated
ERISA, thereby depriving plaintiffs of rights under a pension plan
and violating a Congressional mandate. A losing plaintiff, on the
other hand, will not necessarily be found “culpable,” but may be
only in error or unable to prove his case.

2
3
4
5

Marquardt v. N. Am. Car Corp., 652 F.2d 715, 720 (7th Cir. 1981); accord Carpenters, 726 F.2d at
6
1416. In arguing that Defendants have not shown that Plaintiffs acted culpably, Plaintiffs contrast
7
their conduct with that in Credit Managers, where the plaintiff receiver continued to pursue a
8
claim after remand from the Ninth Circuit when it knew it had no evidence to support the claim.
9
See Credit Managers, 25 F.3d at 749. In finding bad faith that supported a fee award, the court
10

noted that the district court “made clear that its decision to allow the case to proceed to trial was

11
United States District Court
Northern District of California

based primarily on misrepresentations made by CMA and its counsel regarding the facts that it
12

could prove.” Id. Plainly, this conduct is distinctly different Plaintiffs’.

13
Other cases cited by Defendants are more on point. In Dublin Eye Assocs, the court
14
entered a fee award against plaintiff trustees who brought a time-barred lawsuit against a service
15
provider whom they alleged sold improper life insurance policies to their plan more than a decade
16
earlier. 2014 WL 1217664, at *2. The culpability factor of the Hummell test favored an award of
17
18

fees because plaintiffs “were willfully ignorant of their obligations as Trustees and of the Plan
investments.” Id. at *5. In Foley, the plaintiff claimed that he had been terminated from

19
employment for the purpose of interfering with his pension, an ERISA violation. 30 F. Supp. 2d
20
at 368. He filed his suit ten years after his discharge, his claim was time barred, he had no
21
evidence of illegal motivation for the firing, and there was ample evidence of a legitimate motive.
22
Id.
23
These cases are easily distinguishable from the way Plaintiffs litigated their ERISA claims
24
in this lawsuit. Although the Court ultimately concluded that Plaintiffs could not prove their case
25
26

and entered judgment in Defendants’ favor, their claims were not groundless and were not barred
by the statute of limitations. Defendants’ reply brief contends that Plaintiffs misrepresented that

27
all of the benefits projections showed that death benefits did not fall below face value and that
28
6

1

Wells Fargo’s predecessor interpreted the Plan in the same they that Plaintiffs did. While the

2

Court did not find Plaintiff’s analysis of the benefits projections persuasive, they put forward good

3

faith, if mistaken, arguments for their position that the documents supported their claims. The

4

Court does not conclude that they deliberately lied. Moreover, Defendants’ citation to Angichiodo

5

v. Honeywell Pension & Savings Plan, 2017 WL 1833586, at *2 (D. Ariz. May 8, 2017), is

6

unavailing where the court found that the plaintiff was culpable because she had all of the

7

information she needed before filing suit to correct her misunderstanding of how the benefits

8

claim process worked. Plaintiffs had other bases for their benefits claims, although these, too, did

9

not prevail in the end. For example, they relied upon a summary plan description, which they
argued was a Plan document and provided for a secured death benefit. Accordingly, there is no

11
United States District Court
Northern District of California

10

basis for concluding that Plaintiffs acted culpably or in bad faith in pursuing this litigation, and

12

this factor does not weigh in favor of an award of attorneys’ fees.

13
14

2.

Ability of Plaintiffs to Satisfy an Award of Fees

The second factor is whether Plaintiffs have the ability to satisfy an award of attorneys’

15

fees. Defendants point to the annual retirement benefits that they are entitled to receive ($144,523

16

for Black, $149,777 for Burgess, and $223,501 for Smith, plus 3% annual increases) as evidence

17

that they can satisfy the requested $363,876.50 (or $121,292.17 divided three ways) fee award.

18

Defendants also note that they were each highly compensated individuals during the course of

19

their careers.

20

Plaintiffs respond that they are not in a position to pay the requested fees. They state that

21

the loss of life insurance that they expected to receive has dealt them a “severe financial blow,” as

22

they must scramble to make other arrangements for their estates. Opp. at 7. They also raise the

23

specter that some of their retirement income can transition from non-taxable to taxable income if

24

interest rates stay the same. Moreover, they are all in their sixties and have significant health

25

issues, and Defendants’ requested fees would significantly reduce the total annuities they are

26

expected to receive from the Plan. Therefore, they are not able to pay Defendants’ legal fees in

27

addition to their own. Even if they were able to pay Defendants’ fees, this factor does not weigh

28

in favor of awarding fees where “defendants are as able as [the plaintiffs] to bear the cost of their
7

1

attorneys fees.” Bogue v. Ampex, 976 F.2d 1319, 1327 (9th Cir. 1992). As one of the country’s

2

largest banks, Defendants can pay the attorneys’ fees they incurred defending this case, and almost

3

certainly more easily than Plaintiffs would be able to do as individuals.

4

Defendants reply that if Plaintiffs are now contending that they are unable to pay its

5

attorneys’ fees, then they should be afforded an opportunity to conduct post-judgment discovery.

6

Rule 69 provides that: “In aid of the judgment or execution, the judgment creditor or a successor

7

in interest whose interest appears of records may obtain discovery from any person -- including

8

the judgment debtor -- as provided in these rules or by the procedure of the state where the court is

9

located.” Fed. R. Civ. P. 69(a)(2). However, this rule is used “to enforce the judgment by way of
the supplemental proceedings.” Danning v. Lavine, 572 F.2d 1386, 1390 (9th Cir. 1978).

11
United States District Court
Northern District of California

10

Defendants do not provide any authority for permitting this kind of discovery before the Court has

12

entered a money judgment (here, by way of an award of attorneys’ fees), and such discovery

13

would not be appropriate in this situation.

14
15
16
17

For all of the reasons Plaintiffs articulate, this factor does not weigh in favor of an award
of attorneys’ fees.
3.

Whether an Award Would Deter Others

Defendants argue that an award of its attorneys’ fees will deter other sophisticated

18

participants from pursuing other claims, which Defendants contend have no basis in the Plan

19

documents, citing Credit Managers, 25 F.3d 743 (awarding attorneys’ fees to defendants and

20

thereby “serv[ing] the purposes of ERISA by discouraging other litigants from relentlessly

21

pursuing groundless claims”); Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 446 (9th Cir. 2006)

22

(awarding attorneys’ fees to defendant “not to deter plaintiffs from bringing colorable claims for

23

benefits, but from unnecessarily expanding the scope and complexity of litigation”); Carty v.

24

Metropolitan Life Ins., 2017 WL 660680, at *5 (M.D. Tenn. Feb. 17, 2017) (explaining that it is

25

appropriate to deter not only deliberate misconduct but also conduct that is “reckless or

26

negligent”). Defendants argue that such an award vindicates the “‘careful balanc[e]’ between

27

ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation

28

of such plans.” Aetna Health Inc. v. Davila, 542 U.S. 200, 215 (2004) (quoting Pilot Life Ins. Co.
8

1
2

v. Dedeaux, 481 U.S. 41, 55 (1987)).
The interest in deterring meritless claims, however, is balanced against the interest in

3

ensuring that plan participants are not overdeterred from pursuing the prompt enforcement of their

4

rights under a plan. See Honolulu Joint Apprenceticeship & Training Comm. of United Ass’n

5

Local Union No. 675 v. Foster, 186 F. Supp. 2d 1114, 1122-23 (D. Haw. 2001), aff’d, 332 F.3d

6

1234 (9th Cir. 2003) (“The deterrence factor of an attorney’s fee award is generally aimed at

7

protecting participants in employee benefit plans against the abuses or administrative failures of

8

the plan, circumstances which are not present here.”); see also Corder v. Howard Johnson & Co.,

9

53 F.3d 225, 231-32 (9th Cir. 1994) (explaining that fee awards will “tend to deter marginal but
meritorious” claims by plan participants, contrary to Congressional intent); Tingey v. Pixley-

11
United States District Court
Northern District of California

10

Richards W., Inc., 958 F.2d 908, 910 (9th Cir. 1992) (“We see little benefit to be had by charging

12

individual plan-beneficiary plaintiffs . . . with costs for policy reasons that speak more

13

appropriately to institutional litigants in the ERISA arena,” and noting that this factor is generally

14

more appropriate when considering whether to award fees to a plaintiff).

15

There is no clear benefit to deterring colorable but ultimately losing claims, such as the

16

ones brought by Plaintiffs. See Salovaara v. Eckert, 222 F.3d 19, 31 (2d Cir. 2000) (“where, as in

17

this case, an ERISA plaintiff has pursued a colorable (albeit unsuccessful) claim, the third

18

[deterrence] factor likely is not merely neutral, but weighs strongly against granting fees to the

19

prevailing defendant”). It would be contrary to the public policy interest of encouraging good

20

faith ERISA claims to award fees where, as in this case, Plaintiffs did not bring a meritless claim.

21

This is in contrast to situations that might warrant an award of attorneys’ fees against a plan

22

participant who brought patently meritless claims. See Reilly v. Charles M. Brewer Ltd. Money

23

Purchase Pension Plan & Trust, 349 Fed. App’x 155 (9th Cir. 2009) (affirming award where the

24

plaintiff, a self-represented attorney, who had lost his ERISA claims, filed a second identical

25

lawsuit, which was dismissed on res judicata grounds).

26

Plaintiffs also contend that there is no precedent for requiring ERISA plaintiffs to pay a

27

six-figure attorneys’ fee award as Defendants seek. They point out that the cases Defendants cite

28

in its opening motion did not award fees against a plan participation in an amount that is greater
9

1

than the low five figures. In Reilly, the defendant sought award of $29,704 for prevailing at the

2

pleadings stage on its res judicata defense, but the court reduced the award to $14,871. Id. In

3

Shockley, the court awarded fees to defendant but reduced the requested amount by 90 percent out

4

of a concern for overdeterrence. See Shockley, 130 F.3d at 405, 408 (9th Cir. 1997). In Foley, the

5

court awarded a fee of $10,000 out of the requested $40,000 plus costs, to be paid at $100 per

6

month for the remainder of the plaintiff’s life or until he had paid the total without interest. See

7

Foley, 30 F. Supp. 3d at 369.

8

While Defendants counter that several courts have granted six-figure attorneys’ fee awards

9

in ERISA cases, in those cases the plaintiff acted with bad faith or culpability or other unique facts
existed that are not analogous to this case. See Stark v. PPM Am., Inc., 354 F.3d 666, 674 (7th

11
United States District Court
Northern District of California

10

Cir. 2004) (affirming fees award of $261,529 of requested $493,470 against individual whose

12

claims were found to not be substantially justified); Moore v. Lafayette Life Ins. Co., 458 F.3d

13

416, 445-48 (6th Cir. 2006) (affirming award of $120,976.48 in case where the district court found

14

that the plaintiff did not litigate in good faith); DeBartolo v. Health & Welfare Dep’t of the Const.

15

& Gen. Laborers’ Dist. Council of Chicago & Vicinity, 2011 WL 1131110, at *14 (N.D. Ill. Mar.

16

28, 2011) (granting fees award, which was later determined to be $121,601.43, where the court

17

found that the plaintiff’s claims were not substantially justified because the plaintiff lacked

18

standing, his claims were time barred, he failed to exhaust administrative remedies, and he lacked

19

a colorable basis for his claims); Moreno v. S.J. Weaver Contracting, Inc., 2006 WL 2827908, at

20

*3 (N.D. Cal. Oct. 3, 2006) (granting defendants’ fees request in part where the court agreed with

21

the individual defendant’s long-standing argument that there were no grounds for establishing a

22

legal or factual basis for the plaintiff’s claim against him; ultimately the parties settled the case

23

without a final determination from the court on the amount of the requested $122,702.80 in fees

24

that the defendant requested).

25

The Court is persuaded that the risk of deterring colorable ERISA claims of plan

26

participants weighs against awarding attorneys’ fees here. Accordingly, this factor weighs against

27

an award of attorneys’ fees.

28
10

1
2

4.

Whether the Party Requesting Fees Sought to Benefit All Participants
or Resolve a Significant Legal Question

The Ninth Circuit has explained that this factor is generally “more appropriate to a

3

determination of whether to award fees to a plaintiff than a defendant,” so this factor is of lesser

4

significance to the Hummell analysis in this case. See Tingey, 958 F.2d at 910 (quoting

5

Marquardt v. North Am. Car Corp., 652 F.2d 715, 719 (2d Cir. 1981)). Nonetheless, Defendants

6

argue that an award is warranted because they have resolved several significant legal questions in

7

the course of defending this case. First, they established that a successor entity does not need to

8

provide a summary plan document at the time it takes control of a predecessor and also does not

9

need to take “some other affirmative action to inform [participants] of [an administrator’s]
interpretation of the Plan documents at that time.” Dkt. No. 61 at 15-16 (Court’s order granting

11
United States District Court
Northern District of California

10

Defendants’ motion to dismiss Plaintiffs’ fiduciary duty claim in the second amended complaint).

12

Second, they established that the Plan documents do not contain a promise to fund the face value

13

of the life insurance policies in addition to funding the annuity itself, which provides further

14

clarity for other participants about the benefits they are entitled to receive.

15

Here, Wells Fargo was defending itself, rather than proactively vindicating legal rights.

16

However, Defendants are correct that the Court resolved these legal questions in their favor, which

17

help provide guidance to other participants as they consider the extent of their rights under the

18

Plan. At the same time, Defendants have not indicated how large the universe of participants in

19

the Plan is, and in earlier proceedings there was a suggestion that Plaintiffs’ claims are the first

20

ones that have ever been made under the Plan. Therefore, any benefit that resolution of these

21

questions has for other participants might be fairly limited. While not particularly weighty in the

22

overall consideration of this motion, this factor weighs slightly in favor of granting an award.

23
24

5.

Relative merits of the Parties’ Positions

While the Court ultimately ruled in Defendants’ favor, the final question about whether the

25

Plan provided for full funding of the life insurance policies was not an easy question. Although

26

the Court followed Ninth Circuit precedent and ruled in favor of Defendant when it was “not left

27

with the ‘definite and firm conviction that a mistake ha[d] been committed,’” it also commented

28

that Plaintiffs’ arguments were “not groundless,” although “ultimately not persuasive.” Dkt. No.
11

1

86 at 17, 23. Plaintiffs raised colorable claims and legitimate arguments about the terms of the

2

Plan, the role of non-Plan documents, and extrinsic evidence. Plaintiffs’ claims were not

3

meritless, even if they did not win the day. Thus, this factor is neutral.

4

Upon review of the five Hummell factors, the Court concludes that they do not weigh in

5

favor of awarding attorneys’ fees to Defendants in this case. Accordingly, the Court DENIES

6

Defendants’ motion for attorneys’ fees.

7

IT IS SO ORDERED.

8

Dated: March 27, 2018

9
10
ELIZABETH D. LAPORTE
United States Magistrate Judge

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
12