Schuman v. Aetna Life Ins Co et al

Filing 100

ORDER denying 91 Supplemental MOTION for Attorneys' Fees. Signed by Judge Stefan R. Underhill on 10/16/2017. (Jamieson, K)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

JEFF SCHUMAN,
Plaintiff,

No. 3:15-cv-01006 (SRU)

v.
AETNA LIFE INS. CO., et al.,
Defendants.
RULING ON SUPPLEMENTAL MOTION FOR ATTORNEYS’ FEES
Jeff Schuman previously moved for attorneys’ fees and costs under section 502(g)(1) of
the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(g)(1), arguing that
he was entitled to fees and costs because he obtained a remand order in his suit against Aetna
Life Insurance Co. (as claims administrator), Ahold USA’s Master Welfare Benefit Plan, and the
Administrative Committee of Ahold USA (as plan administrator). On June 20, 2017, I issued an
order granting attorneys’ fees but sharply reducing the award to less than one-quarter of
Schuman’s requested amount. See Schuman v. Aetna Life Ins. Co., 2017 WL 2662191 (D. Conn.
June 20, 2017). Schuman now seeks an additional $9,173.75 in “fees for fees” to compensate
him “for time spent . . . reviewing defendants’ opposition [to the motion for attorneys’ fees],
reviewing Court orders, research[ing] and drafting the Reply brief, and drafting [his] motion for
supplemental fees.” See Suppl. Mot. Attorneys’ Fees, Doc. No. 91, at 1.
The $38,627.50 I previously awarded “adequately—even generously”—“compensate[d]
Schuman for his limited success on the merits.” See Schuman, 2017 WL 2662191, at *10.
Consistent with my “substantial discretion in fixing the amount of an [ERISA] fee award,” see
Comm’r, INS v. Jean, 496 U.S. 154, 163 (1990), I decline to award Schuman additional fees for
the time spent preparing and litigating his inflated attorneys’ fees application.

I.

Standard of Review
Section 1132(g)(1) of ERISA provides that “[i]n any action under this subchapter . . . by

a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable
attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). The Supreme Court
has held that, under the language of the statute, “a fee claimant need not be a ‘prevailing party’ to
be eligible for an attorney’s fees award.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242,
252 (2010). Instead, a claimant need only “show ‘some degree of success on the merits’ before a
court may award attorney’s fees under [section] 1132(g)(1).” Id. at 255 (quoting Ruckelshaus v.
Sierra Club, 463 U.S. 680, 694 (1983)). “[S]ome degree of success on the merits” demands more
than “‘trivial success on the merits’ or a ‘purely procedural victor[y].’” Id. (quoting Ruckelshaus,
463 U.S. at 688 n.9). The court must be able to “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.’” Id. (quoting
Ruckelshaus, 463 U.S. at 688 n.9) (other internal quotation marks omitted).
“[W]hether a plaintiff has obtained some degree of success on the merits is the sole factor
that a court must consider in exercising its discretion,” but the court may also look to the factors
set forth in Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869 (2d Cir. 1987).
See Donachie v. Liberty Life Assurance Co. of Bos., 745 F.3d 41, 46 (2d Cir. 2014). Under
Chambless, in determining whether to award attorneys’ fees, the court may consider:
(1) the degree of opposing parties’ culpability or bad faith;
(2) [the] ability of opposing parties to satisfy an award of attorneys’ fees;
(3) whether an award of attorneys’ fees against the opposing parties would deter other
persons acting under similar circumstances;

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(4) whether the parties requesting attorneys’ fees sought to benefit all participants and
beneficiaries of an ERISA plan or to resolve a significant legal question regarding
ERISA itself; and
(5) the relative merits of the parties’ positions.
Donachie, 745 F.3d 41, 46 (2d Cir. 2014) (quoting Hardt, 560 U.S. at 249 n.1; citing Chambless,
815 F.2d at 871 (same factors, but with order of fourth and fifth factors reversed)). Because
“Congress intended the fee provisions of ERISA to encourage beneficiaries to enforce their
statutory rights,” those provisions “must be liberally construed to protect the statutory purpose.”
Slupinski v. First Unum Life Ins. Co., 554 F.3d 38, 47 (2d Cir. 2009) (internal quotation marks
omitted). In particular, “granting a prevailing plaintiff’s request for fees is appropriate absent
‘some particular justification for not doing so.’” Donachie, 745 F.3d at 47 (quoting Birmingham
v. SoGen-Swiss Int’l Corp. Ret. Plan, 718 F.2d 515, 523 (2d Cir. 1983)).
II.

Background
The background of this case is set forth at length in Schuman v. Aetna Life Insurance Co.,

2017 WL 1053853, at *2–*9 (D. Conn. Mar. 20, 2017). After I remanded Schuman’s long-term
disability claim to the claims administrator, Schuman moved for attorneys’ fees and costs in the
amount of approximately $167,000, arguing that had obtained “some degree of success on the
merits” as required to recover attorneys’ fees under ERISA. See Schuman, 2017 WL 2662191, at
*3. The defendants opposed Schuman’s motion, contending that Schuman “did not achieve any
‘degree of success on the merits’” and that attorneys’ fees should be denied or “substantially
reduced” under the Chambless factors. See id.
On June 20, 2017, I issued a ruling in which I granted Schuman’s motion for attorneys’
fees because he “achieved ‘some success on the merits.’” Id. at *5 (quoting Hardt, 560 U.S. at
256). I conclude, however, that Schuman should “recover attorneys’ fees . . . in a smaller amount

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than he ha[d] claimed,” both because the rates charged by his attorneys were “excessive” and
because “[m]any of the hours billed . . . were spent on unsuccessful claims.” Id. at *7, *9. I
reduced the Schuman’s attorneys’ hourly rates by 6.25 percent and 20 percent, respectively, and
“permit[ted] [the] attorneys to recover fees for only one-quarter of their claimed hours.” Id. at
*10. I also “exercise[d] my discretion . . . to deny costs because Schuman [was] not a ‘prevailing
party,’” and “[t]he attorneys’ fees award sufficiently compensate[d] Schuman for his limited
success on the merits.” Id. In total, I awarded Schuman $38,627.50 in attorneys’ fees. Id.
On July 3, 2017, Schuman filed a supplemental motion for attorneys’ fees in the amount
of $9,173.75. See Suppl. Mot. Attorneys’ Fees, Doc. No. 91, at 1. Schuman claims that the fees
account for “time spent on this case . . . after the April 18, 2017 fee application,” including work
“reviewing defendants’ opposition [to the motion for attorneys’ fees], reviewing Court orders,
research[ing] and drafting the Reply brief, and drafting this motion for supplemental fees.” See
id. The defendants filed an opposition to Schuman’s motion three weeks, arguing that Schuman
“seeks payment for ‘failure-on-failure’” and should not be compensated again for his “largely
unsuccessful application for fees.” Mem. Opp’n Suppl. Mot. Attorneys’ Fees, Doc. No. 93, at 1.
III.

Discussion
“[A]ttorneys’ fees for the preparation of the fee application are compensable,” Reed v.

A.W. Lawrence & Co., 95 F.3d 1170, 1183 (2d Cir. 1996) (citing Gagne v. Maher, 594 F.2d 336,
344 (2d Cir. 1979), aff’d on other grounds, 448 U.S. 122 (1980)), and the Second Circuit has
indicated that, “unless there are reasons to the contrary, motion costs should be granted whenever
underlying costs are allowed.” Valley Disposal v. Cent. Vt. Solid Waste Mgmt. Dist., 71 F.3d
1053, 1060 (2d Cir. 1995). Nevertheless, “[t]he district court has broad authority to depart from
th[at] basic assumption.” Valley Disposal, 71 F.3d at 1060. Should “the fee claims [be]
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exorbitant or the time devoted to presenting them . . . unnecessarily high, the judge may refuse
further compensation or grant it sparingly.” Gagne v. Maher, 594 F.2d 336, 344 (2d Cir. 1979),
aff’d on other grounds, 448 U.S. 122, (1980); see Jean, 496 U.S. at 163 (allowing “[e]xorbitant,
unfounded, or procedurally defective fee applications” to be “discount[ed]”). Moreover, “fees for
fee litigation should be excluded to the extent that the applicant ultimately fails to prevail in such
litigation.” Jean, 496 U.S. at 163 n.10. For example, “if [a party]’s challenge to a requested rate .
. . resulted in the court’s recalculating and reducing the award . . . from the requested amount,
then the applicant should not receive fees for the time spent defending the higher rate.” Id.
I already determined that Schuman “achieved ‘some degree of success on the merits,’”
Schuman, 2017 WL 2662191, at *7 (quoting Toussaint v. JJ Weiser, Inc., 648 F.3d 108, 110 (2d
Cir. 2011)), which means that he has crossed the “one-time threshold for fee eligibility.” See
Jean, 496 U.S. at 160. But even though Schuman has demonstrated his “eligibility” for a fee
award, “I am not required to award Schuman fees merely because he is ‘eligible.’” See Schuman,
2017 WL 2662191, at *5 (noting that ERISA provides that “the court in its discretion may allow
a reasonable attorney’s fee and costs of action” (quoting 29 U.S.C. § 1132(g)(1)) (emphasis in
Schuman)). Here, because Schuman’s “fee claims [were] exorbitant” and “the time devoted to
presenting them [was] unnecessarily high,” I “exercise [my] discretion . . . [to] refuse further
compensation” for Schuman’s reply memorandum. See Gagne, 594 F.2d at 344.
In his present motion, Schuman seeks an additional $9,000 in attorneys’ fees for 26.05
hours spent “reviewing defendants’ memorandum, reviewing the Court’s rulings and in
researching, and drafting, the Reply.” See Mem. Supp. Suppl. Mot. Attorneys’ Fees, Doc. No.
91-1, at 1. That work apparently consisted of reading the defendants’ 14-page opposition brief
and then drafting Schuman’s 10-page reply. See Mem. Opp’n Mot. Attorneys’ Fees, Doc. No.

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88; Reply Mem. Supp. Mot. Attorneys’ Fees, Doc. No. 89. As an initial matter, 26 hours to read
and prepare a short reply to the defendants’ opposition strikes me as “unnecessarily high.” See
Dagostino v. Computer Credit, 238 F. Supp. 3d 404, 418 (E.D.N.Y. 2017) (concluding that
“plaintiff’s request of fifteen hours for work performed in connection with the reply brief [was]
unnecessarily high”). “Requesting attorneys’ fees is basically a clerical task, which, when feebly
resisted, can be done cheaply and quickly.” See Nw. Nat’l Life Ins. Co. of Milwaukee v. Lutz, 933
F. Supp. 730, 733 (C.D. Ill. 1996). Although Schuman was entitled to reply to the defendants’
opposition, his short memorandum —which “contain[ed] little more than the facts and a
recitation of some black-letter law regarding attorney[s’] fee requests”—“should not have
consumed [26] hours” of his attorneys time. See id. at 735; cf. id. at 733 (60.7 hours for “printing
out billing statements, preparing a few boilerplate affidavits regarding counsels’ professional
qualifications, and filing a few short memoranda” was “not reasonable”).
Furthermore, even were the hours reasonable, much of the time incurred by Schuman’s
attorneys “was spent on attempts to justify excessive and unreasonable fees and expenses . . . that
never should have been submitted to the court at all.” See Eli Lilly & Co. v. Zenith Goldline
Pharm., 264 F. Supp. 2d 753, 783–84 (S.D. Ind. 2003). In making their “exorbitant” $167,000
request, see Gagne, 594 F.2d at 344, Schuman’s attorneys not only attempted to charge excessive
rates, but also relied on hours that “clearly were spent on unsuccessful claims.” See Schuman,
2017 WL 2662191, at *9. After “apply[ing] an across-the-board reduction . . . to account for
Schuman’s partial victory,” I ultimately allowed Schuman “to recover fees for only one-quarter
of the[] claimed hours”—and I considered even that reduced amount “generous[].” Id. at *9–*10
(internal quotation marks omitted). Because Schuman substantially “fail[ed] to prevail” in his

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motion for attorneys’ fees,1 he “should not receive fees for the time spent defending the higher
rate” and excessive hours. See Jean, 496 U.S. at 163 n.10. In short, “given that the hours
expended on [and claimed in] the initial fee application were excessive, . . . no additional award
is warranted for the fees or costs in connection with the reply.” See Barbu v. Life Ins. Co. of N.
Am., 2015 WL 778325, at *6 n.3 (E.D.N.Y. Feb. 24, 2015); accord Zenith Goldline Pharm., 264
F. Supp. 2d at 784 (“[T]he court has the discretion, and exercises it here, to deny entirely any
fees incurred in preparing the extravagant fee and cost petition.”).
Schuman’s counsel already “showed questionable judgment in asking for [$167,000] in
fees when he had prevailed on”—at most—“only one of his claims.” See Muscare v. Quinn, 680
F.2d 42, 45 (7th Cir. 1982); see Schuman, 2017 WL 2662191, at *10 (observing that “Schuman
was (partially) successful only on his claim for benefits under the ‘reasonable occupation’
theory”). The $38,627.50 in fees I already awarded “handsomely compensate[d]” Schuman for
his “limited success on the merits.” See Lutz, 933 F. Supp. at 735; Schuman, 2017 WL 2662191,
at *10. I conclude that any additional fees would award Schuman a “windfall[]” and
“unjustifiably punish” the defendants. See In re Agent Orange Prod. Liab. Litig., 818 F.2d 226,
232 (2d Cir. 1987) (“[O]vercompensation would not be consistent with the need to prevent
windfalls.”); Lutz, 933 F. Supp. at 735. Therefore, I exercise my “discretion to deny [Schuman]’s
second fee request in its entirety.” See Muscare, 680 F.2d at 45 (citing Gagne, 594 F.2d at 344).

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Of course, “a fee claimant need not be a ‘prevailing party’ to be eligible for an attorney’s fees
award under [29 U.S.C.] § 1132(g)(1).” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242,
252 (2010). Even in ERISA cases, though, Hensley v. Eckerhart, 461 U.S. 424 (1983), still
“requires the district court to consider the relationship between the amount of the fee awarded
and the results obtained.” Comm’r, INS v. Jean, 496 U.S. 154, 163 n.10 (1990); see Scarangella
v. Grp. Health, 731 F.3d 146, 156 n.14 (2d Cir. 2013) (noting, in an ERISA case after Hardt, that
Second Circuit “case law allows reductions in attorney’s fees based on partial success” (citing
Hensley, 461 U.S. at 435 n.11)); Gross v. Sun Life Assur. Co. of Can., 763 F.3d 73, 86 (1st Cir.
2014) (indicating Hensley factors remain applicable to ERISA cases after Hart).
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IV.

Conclusion
For the reasons stated, I deny Schuman’s supplemental motion for attorneys’ fees.

So ordered.
Dated at Bridgeport, Connecticut, this 16th day of October 2017.
/s/ STEFAN R. UNDERHILL
Stefan R. Underhill
United States District Judge

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