Brasley v. Fearless Farris Service Stations, Inc. et al

Filing 360

MEMORANDUM DECISION AND ORDER. Plaintiffs' Renewed Motion for Award of Attorney Fees (Dkt. 351 ) is GRANTED. Defendants must pay Plaintiffs a total of $405,479.20 in fees. Plaintiffs' Motion for Leave to File Supplemental Briefing (Dkt. 356) is DEEMED MOOT. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (km)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
EDWARD BRASLEY, et al.,
Case No. 1:08-cv-00173-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
FEARLESS FARRIS SERVICE
STATIONS, INC., et al.,
Defendants.

INTRODUCTION
The Court has before it Plaintiffs’ Renewed Motion for Attorney Fees (Dkt. 351)
and Motion for Order for Leave to File Supplemental Briefing (Dkt. 356). The motions
are fully briefed and at issue. For the reasons explained below, the Court will GRANT
the Renewed Motion for Attorney Fees in part (Dkt. 351), and the Motion for Leave to
File Amended Briefing (Dkt. 356) will be DEEMED MOOT.
BACKGROUND
The background of this case is well known to each party. Previously, this Court
considered Plaintiffs’ Motion for Attorney Fees (Dkt. 313) and held that Plaintiffs had
not attained “some degree of success on the merits.” (Dkt. 323). On appeal, the Ninth
Circuit disagreed. See Brasley v. Fearless Farris Serv. Stations, 714 F. App’x 790, 791
(9th Cir. 2018). On remand, the Court now considers whether the factors delineated in

MEMORANDUM DECISION AND ORDER - 1

Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980) justify a discretionary
award of both district court and appellate attorney fees. Id.
LEGAL STANDARD
The Court “in its discretion may allow a reasonable attorney’s fee and costs of
action to either party” in an ERISA action. Simonia v. Glendale Nissan/Infiniti Disability
Plan, 608 F.3d 1118, 1120 (9th Cir. 2010); see also 29 U.S.C. § 1132(g)(1). The party
claiming fees and costs need not be the prevailing party but must show some degree of
success on the merits. Id. (citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242,
252 (2010)). A “claimant can satisfy that requirement 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.” Id. at 1120–21 (citing Hardt, 560 U.S. at 255). Once a party
establishes “some degree of success on the merits,” the Court may exercise its discretion
to grant fees and costs under § 1132(g)(1). Id. The five factors set forth in Hummell v.
S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980) guide this Court’s decision.
The factors are:
“(1) the degree of the opposing parties’ culpability or bad faith; (2) the
ability of the opposing parties to satisfy an award of fees; (3) whether an
award of fees against the opposing parties would deter others from acting
under similar circumstances; (4) whether the parties requesting fees sought
to benefit all participants and beneficiaries of an ERISA plan or to resolve a
significant legal question regarding ERISA; and (5) the relative merits of
the parties’ positions.”
Id.

MEMORANDUM DECISION AND ORDER - 2

“None of the Hummell factors is necessarily decisive; various permutations and
combinations can support an award of attorney fees.” Paddack v. Morris, 783 F2d 844,
846 (9th Cir. 1986). Unless Defendants can show the existence of “special circumstances
[that] would render such an award unjust,” the Court’s discretionary decision will stand.
McElwaine v. US W., Inc., 176 F.3d 1167, 1172 (9th Cir. 1999).
ANALYSIS
1.

Plaintiffs’ Motion for Attorney Fees Prior to Appeal
The court will grant Plaintiffs’ request for a fee award at the district court level.

The Ninth Circuit determined, on appeal, that Plaintiffs had attained some degree of
success in this Court (9th Cir. Dkt. 54). For that reason, the Court now applies the
Hummel factors to the fees incurred between 2010 and 2015.
(1) Culpability/Bad Faith
Both parties urge this Court to consider different conduct when weighing the first
factor. Defendants suggest the court weigh the Plaintiffs’ post-judgment conduct. Def.’s
Opp. Br., Dkt. 352, pp. 10-11. However, in this case, the Defendants are the “nonclaiming party.” See Micha v. Sun Life Assurance of Can., Inc., 874 F.3d 1052, 1058 (9th
Cir. 2017). As such, the Defendants conduct is squarely at issue and will not be
disregarded.
Plaintiffs, on the other hand, would have this Court consider all of Defendants’
conduct before and after the time of filing in 2008. Dkt. 351, pp. 2-8. In support of this
view, Plaintiffs cite to Micha v. Sun Life Assurance of Can., Inc., which holds that the
MEMORANDUM DECISION AND ORDER - 3

court must consider any pre-appeal bad faith or culpability in determining whether to
award attorney fees. 874 F.3d at 1058. However, Micha concerned a factually distinct
case.
In Micha, the plaintiffs were awarded litigation attorney fees and the defendants
appealed to insulate itself from the award of fees. Id. at 1054–55. The defendants then
aggressively fought the award on appeal, even filing a petition for certiorari, causing
significant expenses to the appellees. Id. Unlike Micha, here Plaintiffs were awarded
attorney fees by this Court, which were paid. Dkt. 173. Now Plaintiffs move for
attorneys’ fees a second time. Unlike the defendants in Micha, here Defendants were not
attempting to insulate themselves by appealing an award of fees after the 2010 trial.
Rather, it was Plaintiffs who challenged the sufficiency of Defendants’ compliance with
the judgment, which continued the litigation. Thus, Micha is distinguishable from the
case at hand.
Indeed, the Court previously determined that forcing the Plaintiffs to litigate these
issues at a jury trial with a judgment in hand constituted “at least some degree of
culpability or bad faith on the part of Defendants.” Dkt. 167. But Defendants paid or
settled that order of $390,153.60 in attorney fees after the 2010 trial. Dkt. 172. To again
consider those acts would be unjust. Fairness requires this Court to consider whether
Defendants acted with bad faith solely during post-judgment litigation.
After the Court issued its Amended Judgment, Defendants were left to “fund a
plan, qualified and consistent with the requirements of ERISA.” Dkt. 145, ¶ 6.

MEMORANDUM DECISION AND ORDER - 4

Defendants attempted to create this qualified plan, but upon Plaintiffs’ objection the
Special Master ultimately determined that “the Defendants [could not] fully comply with
the Court’s Amended Judgment and related Order because doing so would violate ERISA
or tax law.” Dkt. 245, pp. 12. Thus, the Court’s Amended Judgment left Defendants
between a rock and a hard place: no matter how they proceeded, Defendants would
ultimately be in violation of federal law or the Amended Judgment.
To hold that Defendants’ effort to comply with the Amended Judgment constituted
bad faith would punish Defendants for trying to resolve this issue in accordance with the
Court’s terms. Instead, the Court faults the subsequent litigation on a lack of precedent
and the inherent complexities of ERISA law. For this reason, bad faith will not be
attributed to Defendants’ post-judgment conduct.
(2) Ability to Satisfy a Fee Award
When an action is brought by an ERISA beneficiary, a defendants’ “ability to pay
should weigh strongly in favor of an award of attorney fees. Micha, 874 F.3d at 1058
(citing Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 590 (9th Cir. 1984)). Like in
2010, Defendants concede that their ability to pay is greater than that of Plaintiffs. Dkt.
352-1, pp. 11. Yet, Defendants also argue that Plaintiffs’ counsel are “well able to absorb
the loss of attorney fees for their pre-appeal conduct.” Id. This argument improperly
conflates two distinct factors: (1) bad faith, and (2) the parties ability to satisfy an award.
In considering the latter, the Court evaluates the “resources available to the pensioners”
not their attorneys. Smith, 746 F.2d at 590. Because Defendants do not dispute their

MEMORANDUM DECISION AND ORDER - 5

ability to pay a fee award or argue that Plaintiffs are better suited to do so, this factor
weighs in favor of Plaintiffs.
(3) Whether A Fee Award Would Deter Others
While an award of attorney’s fees may deter future defendants from short
changing judgments awarded for ERISA violations, Defendants argue that such an award
may also encourage plaintiffs to frivolously challenge compliance with the court
judgments. These are serious risks. On one hand, courts impose judgments in ERISA
cases with the expectation that beneficiaries will be made whole. See McElwaine, 176
F.3d at 1171–74 (an award would “deter other employers from forcing beneficiaries to
undertake costly litigation to preserve their claims”). On the other, courts want to deter
beneficiaries from bringing meritless claims.
Yet, the Ninth Circuit has characterized Plaintiffs’ post-judgment conduct in a
favorable light. On appeal, the Court found that Plaintiffs had some success on their
claims in post-judgment litigation. To the extent that Defendants argue that a large
portion of the fees sought in this matter are related to the unsuccessful and meritless
positions Plaintiffs took post-judgment, the Court rejects that argument. Because the
Court of Appeals held that Plaintiffs’ post-judgment claims had merit, imposing a fee
award against Defendants would more likely deter employers from short changing
employees’ ERISA judgments than encourage “other litigants from relentlessly pursuing
groundless [post-judgment] claims.” Credit Managers Assoc. v. Kennesaw Life & Acc.

MEMORANDUM DECISION AND ORDER - 6

Ins. Co., 25 F.3d 743, 748 (9th Cir. 1994). Therefore, the third Hummel factor also
weighs in favor of an award of attorney fees.
(4) Benefit to All Participants/Significant Legal Questions
There are two considerations within the fourth Hummel factor. The first concerns
whether Plaintiffs sought to benefit all participants and beneficiaries. Hummel, 634 F.2d
at 453. As to this question, the Court agrees with Plaintiffs’ characterization of the 20102015 litigation as impacting “most or all Participants.” Dkt. 353, pp. 9. From 2008 to
2010, Plaintiffs represented 28 Participants from the 1995 Plan liquidated by Defendant.
Dkt. 351, pp. 4. Approximately twelve participants settled their claims with Defendants
from 2010 to 2015, leaving seventeen Participants to benefit from Plaintiffs’ postjudgment work. Id. Given that a majority of the remaining Plan beneficiaries were
represented, the Court agrees that Plaintiffs sought to benefit all remaining participants
post-judgment.
Next the Court determines whether Plaintiffs sought to resolve any significant
legal questions. Hummel, 634 F.2d at 453. Defendants invite the Court to focus, in large
part, on the past three years of post-judgment litigation. Defendants argue that litigation
from 2015-2018 has only focused on attorney fees, and therefore should not constitute a
significant legal question. The Court declines to restrict its analysis to the prior three
years. Before 2015, Plaintiffs litigated some important ERISA issues concerning
Defendants’ satisfaction of the Amended Judgment. These issues were important because
they related to the repayment of Plaintiffs’ liquidated benefits. Others were not. Because

MEMORANDUM DECISION AND ORDER - 7

these issues did or would have benefited the seventeen remaining participants, this factor
weighs in favor of Plaintiffs’ award.
(5) Relative Merits of the Parties’ Position
Although Plaintiffs overstate their success on the merits of this case, the last
Hummel factor also weighs in favor of granting attorney fees. In addition to the outcome
of the underlying suit, the court may analyze under this factor whether the law was clear
at the time of litigation, whether the losing party had a strong equitable argument despite
it ultimately being foreclosed on, and whether the losing party’s position was simply
“incorrect” rather than “unmeritorious”. Honolulu Joint Apprenticeship & Training
Comm. of United Assoc. Local Union No. 675 v. Foster, 332 F.3d 1234 (9th Cir.
2003). When considering the fifth factor, “courts should be careful neither to penalize
[parties] for seeking to enforce employer obligations under ERISA nor to encourage
employers to be indifferent to their obligations.” Carpenters S. Cal. Admin. Corp v.
Russell, 726 F.2d 1410, 1416 (9th Cir. 1984).
A brief summary of the procedural posture is helpful to evaluate this factor. After
Plaintiffs received the Amended Judgment, Defendants were ordered to report their
progress in satisfying that judgment. Dkt. 154. Post-judgment litigation began with
Plaintiffs’ objection to that report. Dkt. 166.
Plaintiffs’ original position, post-judgment, was that the Defendant had not
complied with several aspects of the Amended Judgment. See Dkt. 190. This overarching
issue would eventually be determined true, but not all of Plaintiffs’ objections were of

MEMORANDUM DECISION AND ORDER - 8

merit. Plaintiffs asserted that Defendants were noncompliant in the following ways: (1)
inadequate plan funding; (2) a $2,295.00 Deficiency in the Settlement Betty Newell’s
claim; (3) the Imposition of FICA Taxes on all Participants; (4) the 8% Discount Rate for
lump sum payments in lieu of annuity payments violated the Order (advocating for a
4.5% to 5.5% rate); and (5) the funding of death benefits. Dkt. 198-1. At all times,
Plaintiffs maintained that the plan could and should be funded to make “Plaintiffs
whole.” Id. at 3.
In response to Plaintiffs’ objections and request for a special master, Defendants
argued that the “1995 Plan was not a qualified plan and could not be made to be one
retroactively.” Dkt. 199 at pp. 8. This was ultimately correct. See Dkt. 245, pp. 11.
However, Defendants incorrectly continued to maintain that Plaintiffs were required to
pay their own FICA taxes on any settlement or distribution from the suit. Id. After fully
briefing the issues, both parties put them before a Special Master. See Dkt. 222.
Almost two years after Plaintiffs’ objection, the Special Master ultimately
determined that Defendants had not satisfied the Amended Judgment. But, on the conduct
of the parties, the Special Master determined that both Parties had frustrated the
proceedings, “remained entrenched in their positions,” and “clouded the issues.” Dkt.
245. As to Defendants’ conduct, he stated:
Defendants, for example, have continued to state that the 1995 plan is a
non-qualified deferred compensation plan [], but both this Court and the
Roberts court have previously ruled otherwise. … In addition, Defendants
have continued to assert that the payment of FICA taxes remains an open
issue … but the Court has previously ruled in paragraph 3 of the Related
Order, Dkt. 204, that the Defendants should pay FICA taxes due on
MEMORANDUM DECISION AND ORDER - 9

payments to Plaintiffs.
Plaintiffs also hindered the resolution of this case. In the Special Master’s Final Report,
he stated:
The Plaintiffs … continued to dispute the settlements obtained by
Defendants from several former participants in the 1995 plan in connection
with cash lump sum cash payments [], but the Court previously ruled these
settlements resolved the 1995 Plan issues as to those individuals.
Id.
To determine either party was particularly meritorious in its position postjudgment would ignore the procedural posture of this case. For this reason, the Court is
unconvinced that Plaintiffs “won” the list of fourteen post-judgment issues in their
briefing.1 Dkt. 351-1, pp. 9.
But, undeniably, Plaintiffs were victorious on several issues. The Special Master
determined that Defendants were not in compliance with the Court’s Order, which, in a
roundabout way, vindicated Plaintiffs’ original objection. Furthermore, despite the
Court’s previous ruling, Defendants maintained that FICA taxes should be paid by
individual Plaintiffs. This issue was improperly maintained by Defendants and weighs in
favor of Plaintiffs’ request for attorney fees. Although the ultimate disposition of this
case was in stark contrast from the positions first proffered in Plaintiffs objections, the

1

Many of the “wins” Plaintiffs list are a result of the Special Masters report. However, the
Special Master ultimately determined that the Plaintiffs proposed funding of the Plan would be
impossible.

(Continued)

MEMORANDUM DECISION AND ORDER - 10

Court finds that Plaintiffs did bring some meritorious claims. The Court does not fault
Plaintiffs for losing certain issues.2 Thus, this factor also weighs in favor of Plaintiffs’
award.
B.

Conclusion

On balance, the five Hummel factors weigh in favor of awarding attorney fees to
Plaintiffs, especially in light of the Ninth Circuit’s requirements to “keep at the forefront
ERISA’s purposes that ‘should be liberally construed in favor of protecting participants
in employee benefit plans.” McElwaine, 176 F.3d 1167, 1173 (9th Cir. 1999). Of the
factors, all but bad faith favors an award of attorney fees. In the Ninth Circuit, “bad faith
is a factor that would always justify an award, [but] it is not required.” Smith, 746 F.2d at
590. Accordingly, the Hummel factors guide this Court to conclude that Plaintiffs are
entitled to their reasonable pre-appeal fees.
C.

There are no special circumstances warranting a denial of fees

None of Defendants’ bulleted “special circumstances”, (Dkt. 352, pp. 15-16),
render an award of fees unjust. Defendants argue that because Plaintiffs did not advocate
for the 1995 Plan and the Qualified Plan to be terminated, they created special
circumstances justifying a denial of fees when that result occurred. But, undisputedly,

2

Despite losing initial issues, ERISA employee plaintiffs are entitled to a reasonable attorney’s
fee “if they succeed on any significant issue in litigation which achieves some of the benefit the parties
sought in bringing suit.” Smith, 746 F.2d 587, 589. See also Hensley v. Eckerhart, 461 U.S. 424, 433
(1983) (winning an issue crosses the “statutory threshold” for awarding fees).

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this action took an unpredicted course after being reviewed by the Special Master. Before
the Special Master proposed to eliminate the Plans all together, Plaintiffs were merely
attempting to enforcing the rights laid out in the Court’s Amended Judgment (Dkt. 166),
as they interpreted them. Given the complexities of this area of law and scarce precedent,
both Parties advocated for some ultimately unsuccessful positions. But this alone does
not constitute a “special circumstance.” The remainder of Defendants’ arguments have
either been addressed in the above application or relate to delay. To the delay component,
the Court finds that neither party was quick to resolve this case. Overall, Defendants have
failed to show the existence of special circumstances rendering an award unjust.
2.

Plaintiffs Are Entitled to Their Reasonable Fees
A.

Legal Standards Governing Attorney Fees ERISA Cases

In ERISA actions, “the court in its discretion may allow a reasonable
attorney’s fee and costs.” 29 U.S.C.A. § 1132(g)(1). A two-step lodestar/ multiplier
approach is used to calculate reasonable attorneys’ fees. Welch v. Metropolitan Life Ins.
Co., 480 F.3d 942, 945 (9th Cir.2007). “First, the court establishes a lodestar by
multiplying the number of hours reasonably expended on the litigation by a reasonable
hourly rate.” Id. “In addition to setting the number of hours, the court must also
determine a reasonable hourly rate, ‘considering the experience, skill, and reputation of
the attorney requesting fees.’” Welch, 480 F.3d at 946 (quoting Chalmers v. City of Los
Angeles, 796 F.2d 1205, 1210 (9th Cir.1986)). “Second, in rare and exceptional cases, the

MEMORANDUM DECISION AND ORDER - 12

district court may adjust the lodestar upward or downward using a multiplier based on
facts not subsumed in the initial lodestar calculation.” Id.
B.

Reasonable Attorneys’ Fees are Based on the Hourly Rates Supported
by the Record and the Actual Hours Worked
(a)

Reasonable Hourly Rate

Plaintiffs seek an award of $381,082 based on an accounting of time expended by
counsel in this case. The Court has considered the declarations of Jeffery Mandell, Loren
K. Messerly, and Robert Huntley3 submitted by Plaintiffs to demonstrate the
reasonableness of the rates requested by each attorney in the case, (see Decls., Dkt. 351,
Attachs. 2-4), and determines the hourly rates of $400 for Mandell, $285 for Messerly,
and $450 for Huntley are reasonable for the type of work performed in Boise, Idaho,
taking into consideration each attorney’s years of experience. See Dkt. 313-3; Dkt. 351-3;
Dkt. 351-4.
Defendants take issue with opposing counsel, specifically Messerly, requesting his
current hourly rate ($285) when that number differed in briefing on appeal ($225). Dkt.
352, pp.17-18. The Court is unpersuaded that this constitutes bad faith, let alone
“perjury.” In the Ninth Circuit, it is appropriate to compensate deferred payment “by
applying the attorneys’ current rates to all hours billed during the course of the
litigations.” In re Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1305

3

These three parties will be referred to hereafter respectively, as “Mandell”, “Messerly”, and
“Huntley.”

MEMORANDUM DECISION AND ORDER - 13

(9th Cir. 1994); Welch, 480 F.3d at 947. All three attorneys request a rate greater than
that submitted earlier in this litigation, e.g., Huntley from $350 to $450. Given the
experience of each attorney (Huntley: 59-years, Mandell: 36-years, Messerly: 15-years)
and the prevailing rates in the District of Idaho4, it is reasonable to request a greater fee
now than at the beginning of this prolonged litigation, which began a decade ago. In fact,
the rate of $285 per hour for Messerly’s time is reasonable because it is in the lower end
of the hourly rates customarily charged and it reflects his normal billing rate. See Dkt.
351-3, pp. 5.
As to the attorney’s employed by the ERISA Law Group, the Court is concerned
with unexplained billing. The Court has no concern with the hourly rate of Ms.
McKinney, which was previously approved by this Court. Dkt. 167. However, while
Mandell explained the changes in his requested rate, John Hughes has not. And Mr.
Hughes’ rate does vary: $225 to $275 from December 2010 to May 2012; $280 in
December 2013; $295 in January 2014; $300 in March 2015; $295 in July 2015; and
$305 in April 2016. See Dkt 351-4, Ex. B-C. The Court has agreed to compensate
attorneys in this case at their current reasonable rate. Based on the minimal record before
this Court (Dkt. 205-2; 351-4), Mr. Hughes’ reasonable rate will be adjusted to $290 and
applied to all reasonably expended time.

4

See e.g., Cmty. House, Inc. v. City of Boise, No. 1:05-CV-00283-CWD, 2014 WL 1247758, at
*1–12(D. Idaho Mar. 25, 2014) (conceded that attorneys with 15 years of experience have rates between
$275-$325, while a lead attorney with 34 years of experience had a rate of $400).

MEMORANDUM DECISION AND ORDER - 14

(b)

Time Expended

The Court has carefully reviewed the billing records of all three-counsel attributed
to this case, and the Court agrees with Defendants that some of those hours were not
reasonably expended. In determining the appropriate lodestar amount, the court may
exclude from the fee request any hours that are “excessive, redundant, or otherwise
unnecessary.” Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The Court first addresses
the objections from Defendants and then addresses its own concerns.
(i)

Defendants’ Specific Objections to Huntley’s Request

Defendants bring several challenges to the hours spent by Huntley in this
litigation. See Dkt. 352, pp 16-17. However, the Court will not address generalized
grievances without specific objections grounded in fact and law. See District of Idaho
Local R. Civ. 54.2 (the objecting party must set forth specific grounds of objection).
More specifically, Defendants argues that:
 A motion for punitive damages is mistakenly included in Huntley’s declaration
which should be excluded;
 All of Huntley’s time outside the Special Master’s appointment and his final
report should be excluded;
 Unsuccessful settlement negotiations should be excluded;
 Time spent requesting unreasonable fee motions should be excluded;
 Certain entries have been duplicated before this Court and the Ninth Circuit,
which is improper and should be excluded.

MEMORANDUM DECISION AND ORDER - 15

The Court agrees that it appears Huntley has confused this case with another.
Huntley’s Declaration states that on June 26, 2013, he spent 2.1 hours to “[r]esearch and
draft motion and brief for punitive damages ….” Dkt. 313-2, pp.1. As this Court has
noted in the past, “‘punitive damages are not available under ERISA.’” Holl v.
Amalgamated Sugar Co. LLC, No. 1:13-CV-00231-CWD, 2014 WL 1672873, at *12 (D.
Idaho Apr. 28, 2014) (quoting Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1009
(9th Cir.1998). If Huntley asserts that this was not a mistake, then the Court holds that
spending 2.1 hours to find this easily discoverable law excessive. The Court will remove
time attributed to researching and preparing a motion for punitive damages from the fee
award.
Regarding Defendants’ contention that Huntley has duplicated time spent on a fee
motion before the Ninth Circuit and this Court, Defendants fail to set forth which time
entries are duplicative or “specific grounds of objection.” District of Idaho Local R. Civ.
54.2. Likewise, Defendants have failed to cite any law supporting their assertion that it
would be inappropriate to consider settlement negotiations or what specific entries they
object to. Therefore, the Court will not exclude time spent on fee motions or on
settlement negotiations.
Defendants next contend that Huntley should not be rewarded for the time he
expended challenging the Special Master’s First Report. The Court agrees. It was Huntley
who, on behalf of Plaintiffs, requested this action be put before a Special Master postjudgment. Dkt. 190. In his report, the Special Master referenced Plaintiffs’ expert Mr.

MEMORANDUM DECISION AND ORDER - 16

Turpin’s calculations and methodology for determining interest rates for any lump sum
benefit payments, which used Code Section 417(e) rates. Dkt. 245. The Court adopted the
findings of this report as its own. Dkt. 267. Plaintiffs then erroneously read the Special
Master’s report as requiring optional PBGC interest rates which would result in a
$287,377.69 greater payment to Plaintiffs. Dkt. 287. Plaintiffs then opposed Defendants’
motion to have the author of the First Report clarify his position. Dkt. 296. Despite their
objections, the issue was sent to the Special Master a second time for clarification,
(Second Huss Report, pp. 4, Dkt. 303) and required a de novo review of the previous
Order. Dkt. 310. This required the Court to reiterate that lump sum benefit payments
should be paid with the interest rates referenced in the Special Master’s First Report
(Code Section 417(e)) for minimum lump sum distributions, not those requested by
Plaintiffs. Because the issue was already determined, the Court exercises its discretion to
not award fees on this issue. As a result, Huntley’s fees will be reduced by 73.5 hours.
(ii)

Huntley Block Billing

The Court, on its own initiative, takes issue with prevalent block billing found in
Huntley’s declaration. A fee applicant should maintain billing records in a manner that
enables a reviewing court, and opposing counsel, to easily identify the hours reasonably
expended on a particular task. Hensley, 461 U.S. at 437. Block billing, which bundles
tasks in a block of time, makes it extremely difficult for a court to evaluate the
reasonableness of the number of hours expended. See Role Models America, Inc. v.
Brownlee, 353 F.3d 962, 971, 359 U.S. App. D.C. 237 (D.C. Cir. 2004). The Court may

MEMORANDUM DECISION AND ORDER - 17

reduce the requested fee based on this lack of specificity. Fischer v. SJB-P.D. Inc.., 214
F.3d 1115, 1121 (9th Cir. 2000) (district courts may reduce hours where requests are
poorly documented). See Lee v. Commissioner, 2009 WL 3003858, *1 (D. Ore. Sept. 17,
2009) (reducing award by 10 percent to account for block billing).
Huntley has provided block entries for his time in this matter. For example, on
August 8, 2012, Attorney Huntley states he did the following over the course of 2.3
hours: “Email correspondence with ERISA Group regarding stipulation and Special
Master, research previous pleadings and proposed stipulation and forward same to
Mandell.” Dkt. 313-2, pp. 7. The Court counts at least 5 different tasks bundled into this
block of time. This is the case in many, if not most, of Huntley’s entries.5 As a result, and
in the Court’s discretion, all of Huntley’s fees will be reduced by 20%.
(iii)

Defendants’ Objection to Attorney Mandell’s Expended Time

Defendants assert that Mandell’s fee request prior to appeal should be denied in its
entirety based on the following reasons:
 Mandell sought a result which had no merit and was rejected;
 The proposed time entries are duplicative;

5

Going forward, the Court encourages counsel to bill items such as “drafting and researching” or

“draft and file and serve” in separate billing increments.

MEMORANDUM DECISION AND ORDER - 18

 It includes time spent objecting to the Special Master’s First
Recommendation; and
 “Huntley and Messerly feel unable to vouch for the amount and accuracy of
Mandell’s claimed hours and fees.” Dkt. 351-1, pp. 19, fn. 6.
Although a reduction is necessary for seeking a meritless claim, it is not a basis for
wholesale denial of fees. That reduction will come in the same form as Attorney
Huntley’s. The Court denies attorney fees to Mandell for time spent challenging the First
Report of the Special Master. As a result, Mandell will not be awarded any attorney fees
from September 8, 2014 – when the litigation began to focus almost entirely on
calculations for lump sum payments – to July 13, 2015, when Mandell’s itemized billing
moved to the attorney fee issue. Based on this Court’s own arithmetic, Mandell’s hours
will be reduced by 84.3 hours for time expended on objecting to the Special Master’s
First Report. John Hughes’ hours will also be reduced by 29.4 hours.
As to Defendants’ contention that Mandell’s hours should be excluded because of
a footnote in his co-counsels’ briefing, the Court is unmoved. Pursuant to Local R. Civ.
54.2, Defendants are required to state “specific grounds of objection.” Merely alleging
that co-counsel may be warning the Court of possible impropriety is not a sufficient
ground to decrease an award of attorney fees. Rather, the Court tends to agree with
Mandell, that attorneys in separate offices, “cannot vouch for another’s time.” Dkt 355,
pp. 2. Without case law to support their position, Defendants’ objection is without merit.

MEMORANDUM DECISION AND ORDER - 19

Lastly, the Court addresses Defendants’ bare-bones allegation of duplicative
billing. The Court again directs Defendants to the requirement of specific grounds of
objection. Furthermore, the Court is persuaded that because “Mandell’s fees before the
Ninth Circuit were not submitted to the Ninth Circuit, and [Plaintiffs] do not seek
recovery for [that $33,235.50] here … Plaintiffs reductions should more than compensate
for any duplications of that work.” Dkt. 351-3, ¶ 25 (emphasis provided). Therefore, the
Court will not reduce any fees on the basis of duplication.
(iv)

Mandell’s Billing

Like Huntley, Mandell and his staff used significant block billing throughout their
time keeping record. One particularly dense bundle of tasks was annotated on October
13, 2014, where Mandell inserted the following:
Prepare brief opposing Defendants’ opposition to our motion to use
James Turpin’s calculations and regarding referral to Special Master;
Continue to review various case law and secondary authorities to
confirm that post termination amendment is prohibited per se by
Title IV; Continue to review case law, statutes and various
regulations confirming that the PBGC rates apply equally to standard
and distress terminations, and Defendants allegation of their
application solely to insolvent or bankrupt plans is incorrect; Brief
further review of anti-cutback rule in Title I and Title II to confirm
their unlikely application to interest rate amendment, even if held to
be done on a timely basis; Continue to review and confirm that two
sets of PBGC regulations confirming Section 417(e) is a floor only
and that higher PBGC rates still are used and valid currently,
regardless of REA, GATT, and PPA; Discuss with James Turpin his
conclusion that Defendants violated its own amendment, because it
amended the plan for GATT and not PPA, but used the PPA rates;
Reviewed Defendants’ Notice to Participants as compared with
PBGC and Title I rules governing notice of intent to terminate to
confirm noncompliance with ERISA Section 204(h) and Code
Section 4980F.
MEMORANDUM DECISION AND ORDER - 20

Dkt. 351-4, pp 62. Mandell asserts that this block paragraph is reflective of exactly 12
hours of work, for which he requests $4,020. The next day, Mandell annotated the next
paragraph for 12.1 hours of work:
Review James Turpin Affidavit and phone conference with him to
understand certain matters; Continue to review various case law,
statutes and various regulations to confirm that post termination
amendment is prohibited, to also confirm that post termination
amendment is prohibited, to also confirm that the PBGC rates, as
opposed to the 417(e) rates, apply equally to standard and distress
terminations and not just to insolvent or bankrupt plans; Final review
of PBGC regulations preambles and history confirming Section
417(e) treatment as a floor only and exception regarding Retirement
Equity Act is inapplicable and that higher PBGC rates still are valid
currently, regardless of REA, GATT, and PPA; Review Special
Master Final Report to confirm review of 1955 document is
appropriate to assert such plan’s failure to include Firestone
interpretive authority applies now to Defendants; Review legislative
history regarding various iterations of changes in interest rates
ERISA used over period of time of this plan’s existence, confirming
Hames Turpin analysis; Review notice of intent to terminate to
finally confirm noncompliance with ERISA Section 204(h) and
Code section 4980F; Continue to prepare Plaintiffs’ Combined (1)
Reply to Defendants’ Opposition to Plaintiffs’ Motion for Order
Adopting Turpin’s Calculations and (2) Opposition to Defendants’
Motion to Refer Issue to Special Master; Review Declaration of
James E. Turpin; Prepare Affidavit of Jeffery Mandell
Id. at 63. By combining every task performed in a twelve-hour period, it is impossible to
determine the reasonableness of time spent on any individual task. Surely, awarding full
fees to Mandell based on this timekeeping would question this Court’s judgment and
promote unaccountable billing practices in the District. As a result, Mandell and John
Hughes will have their overall award will be reduced by 20%. See Lahiri v. Universal
Music & Video Distrib. Corp., 606 F.3d 1216, 1222–23 (9th Cir.2010) (affirming district
MEMORANDUM DECISION AND ORDER - 21

court’s reduction of 80% of attorneys’ and paralegals’ hours by 30% to account
for block-billing).
The Court will also exclude hours expended by timekeeper Sarah Simmons. A
description of Ms. Simmons’ qualifications or experience is absent from Mandell’s
current affidavit, (Dkt. 168-3, Dkt. 351-4), or in any prior submission to the Court (See
Dkt. 313-4). The Court, for a similar reason, previously excluded entries from an
anonymous timekeeper in Huntley’s award in 2010. See Dkt. 167. Similarly, it is
impossible to evaluate whether Ms. Simmons’ hourly or time expended researching and
reviewing document is reasonable. The Court would presume that Ms. Simmons is a
paralegal, but Mandell noted in his affidavit that Ruby Perren and Erin Miller are his
paralegals in this case. Id. Therefore, the Court will subtract the amounts billed by Ms.
Simmons from the fee award. A review of the cost bill shows a total of $12,722.50
between July 7, 2015 and July 13, 2016.
(v)

Defendants’ Objection to Attorney Messerly’s Expended Time

Defendants last objections concern Messerly’s: (1) request of $18,000 in fees for
Plaintiffs Motion for Reconsideration of this Court’s denial of fees; and (2) the amount of
time expended on appeal.
In support of their first objection, Defendants argue that Messerly was not
associated with counsel during the Motion for Reconsideration of the denial of fees, and
therefore; should not be entitled to a fee. Again, Defendant has failed to cite any law
bolstering his objection. As far as this Court is aware, the issue of whether an

MEMORANDUM DECISION AND ORDER - 22

unassociated attorney is entitled to fees has not been addressed in this circuit. However,
the Ninth Circuit has stated, “[t]here is no categorical prohibition that prevents a district
court from awarding attorney’s fees to a foreign attorney who has not formally associated
as counsel of record” when the unassociated attorney provided “benefit” to counsel and
“did not duplicate the services.” Wang v. Douglas Aircraft Co., 121 F.3d 719 (9th Cir.
1997). Although Wang concerned an international law firm, the same rational applies
here: “If [Messerly] performed such services, the district court should make an
appropriate award of attorney’s fees based on the reasonable value of the services …” Id.
As to Defendants’ second objection, the Court declines to evaluate whether the
316 hours spent on Plaintiffs’ two-year appeal was reasonable. See Moreno v. City of
Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008) (“By and large, the court should defer
to the winning lawyer’s professional judgment as to how much time he was required to
spend on the case; after all, he won, and might not have, had he been more of a slacker.”).
(vi)

Appellate Fees

Because this Court determined that a fee award is appropriate for a portion of the
litigation in district court, Plaintiffs are entitled to a reasonable attorney fee on appeal.
See McElwaine., 176 F.3d at 1174. As the ERISA Law Group does not request fees for
the appeal, (Dkt. 351-4, pp. 5), only the Huntley Law Firm will have its appellate fees
reduced by 20%.
C.

Conclusion

MEMORANDUM DECISION AND ORDER - 23

In sum, the application for attorney’s fees is reasonable. For the reasons previously
discussed, the total hours will be reduced as follows: Huntley’s total requested hours
(342.9) will be reduced to 267.3; the Mandell’s total (567.4) by 84.3; and John Hughes’
total (216.5) by 29.4. Furthermore, the ERISA Law Group will not receive an award for
work performed by Ms. Simmons. After multiplying the number of hours reasonably
expended by Huntley, Mandell, and Mr. Hughes by their reasonable hourly rates, the
Court reduces their totals by 20% for block-billing. Based on the foregoing, the Court
finds that Defendants must pay Plaintiffs a total of $405,479.20 in fees.6
ORDER
IT IS ORDERED:
1.

Plaintiffs’ Renewed Motion for Award of Attorney Fees (Dkt. 351) is
GRANTED. Defendants must pay Plaintiffs a total of $405,479.20 in fees.

2.

Plaintiffs’ Motion for Leave to File Supplemental Briefing (Dkt. 356) is
DEEMED MOOT.

DATED: November 29, 2018
_________________________
B. Lynn Winmill
Chief U.S. District Court Judge

6

(Messerly Law: $109,668) (Huntley Law Firm: $96,120) (ERISA Law Group: $199,691.20).

MEMORANDUM DECISION AND ORDER - 24