Chicago Regional Council of Carpenters Pension Fund et al v. Rink Systems, Inc.
Filing
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MEMORANDUM Opinion and Order signed by the Honorable Ronald A. Guzman on 11/12/2014: For the reasons set forth above, the Court grants plaintiffs' petition for fees. The Court orders the parties to file an agreed judgment order that comports with this order and the summary judgment order on or before November 20, 2014. Mailed notice (cjg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHICAGO REGIONAL COUNCIL
OF CARPENTERS PENSION FUND,
CHICAGO REGIONAL COUNCIL
OF CARPENTERS WELFARE FUND,
CHICAGO AND NORTHEAST
ILLINOIS REGIONAL COUNCIL OF
CARPENTERS APPRENTICE AND
TRAINING PROGRAM and LABOR/
MANAGEMENT UNION CARPENTRY
COOPERATION PROMOTION FUND,
Plaintiffs,
v.
RINK SYSTEMS, INC.
Defendant.
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No. 13 C 4886
Judge Ronald A. Guzmán
MEMORANDUM OPINION AND ORDER
Plaintiffs sued defendant Rink Systems, Inc. pursuant to the Employee Retirement Income
Security Act (“ERISA”) for Rink’s alleged failure to produce books and records and make required
contributions to the Funds for two employees, Megan Keefer and Scott Overgaard.
Plaintiffs
moved for summary judgment on their claims, which the Court granted as to the claim that
defendant failed to make contributions for Megan Keefer but denied as to the claims regarding
contributions for Scott Overgaard and production of records. (See Aug. 21, 2014 Mem. Opinion &
Order.) After the Court issued the summary judgment order, plaintiffs dropped the claims on which
they did not prevail. (See Pls.’ Mot. Set Br. Sch. Prove Up Damages at 2.) The case is before the
Court on plaintiffs’ motion to prove up their damages on the sole remaining claim, that defendant
failed to make contractually-required contributions for Megan Keefer.
Discussion
According to ERISA, if a plan prevails in a suit to recover delinquent contributions, the
Court “shall award” it:
(A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an amount
equal to the greater of – (I) interest on the unpaid contributions, or (ii) liquidated
damages provided for under the plan in an amount not in excess of 20 percent . . . of
the amount determined by the court under subparagraph (A), [and] (D) reasonable
attorney’s fees and costs of the action, to be paid by the defendant.
29 U.S.C. § 1132(g)(2). Plaintiffs contend, and defendants do not dispute, that they are entitled to
recover $3,560.61 ($1,751.04 for unpaid contributions + $152.56 for interest + $350.21 for
liquidated damages + $1,306.80 for audit fees). (Pls.’ Mot. Set Br. Sch. Prove Up Damages, Ex. A,
Libby Decl. ¶¶ 5, 10.) But defendant argues that the amount plaintiffs seek for attorney’s fees and
costs, $23,125.98, is unreasonable. (See id. Ex. B, McJessy Decl. ¶ 4 (stating that plaintiffs spent
$18,672.00 for attorney time [116.7 attorney hours at $160.00/hour], $822.00 for paralegal time
[13.7 hours at 60.00/hour] and $3,631.98 for costs).)
The $23,125.98 figure is the lodestar, which the Seventh Circuit has said is the “‘[t]he most
useful starting point for determining the amount of a reasonable fee’” in an ERISA collection case.
Anderson v. AB Painting & Sandblasting Inc., 578 F.3d 542, 544 (7th Cir. 2009) (quoting Hensley
v. Eckerhart, 461 U.S. 424, 433 (1983)). However, the court has also said that the lodestar can be
adjusted based on the factors set forth in Hensley including, as relevant here, the amount at issue in
the suit and the results plaintiff obtained. Id. at 544 & n.1 (citing Hensley, 461 U.S. at 430 n.3).
Defendant argues that these factors dictate reducing the fee amount because plaintiffs: (1) prevailed
on only one of their claims; and (2) the fee request is disproportionate to the amount of damages
they recovered.
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Contrary to defendant’s belief, the fact that plaintiffs were not successful on all of their
claims is not a reason for reducing their fee request. According to the Hensley Court, the “results
obtained” factor only comes into play when plaintiff asserts claims that are “distinctly different,”
i.e., “based on different facts and legal theories,” and does not prevail on all of them. Hensley, 461
U.S. at 434-35. In such a case, “no fee may be awarded” to the prevailing party for work done on
the unsuccessful claims. Id. at 435. However, this is not such a case, as plaintiffs only assert ERISA
claims that arise from the same set of facts. See id. at 435 (stating that cases in which the claims
“involve a common core of facts or [are] based on related legal theories . . . . cannot be viewed as
a series of discrete claims”). Thus, their failure to prevail on every claim is not a basis for reducing
their fee request.
Plaintiffs say proportionality is also not a consideration because the Seventh Circuit
eliminated it from the fee analysis in Anderson. In reality, the Court said proportionality can be
consideration in but is not a prerequisite to a reasonableness finding:
[W]e have “rejected the notion that the fees must be calculated proportionally to
damages.” Alexander v. Gerhardt Enterprises, Inc., 40 F.3d 187, 194 (7th Cir.
1994). . . .
....
[But] [s]ome of our cases have expressed concern where attorney’s fees
overshadowed the damages awarded . . . because some other element of the case did
not seem reasonable. . . . This is . . . how we read Moriarty v. Svec, 233 F.3d 955
(7th Cir. 2000) . . . . [where] we stated that, “[w]hile . . . disproportionality is not
determinative and this court has approved attorney’s fees many times the amount of
damages recovered, . . . the district court’s fee order should evidence increased
reflection before awarding attorney’s fees that are large multiples of the damages
recovered or multiples of the damages claimed.” Id. at 968. We quickly reiterated
“that any disproportionality that may be present in this case does not mean that the
amount of attorney’s fees awarded . . . was an abuse of discretion, but only that the
district court should consider such proportionality factors in exercising its discretion
in fashioning a reasonable attorney’s fee.” Id.
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To say that a court should give “increased reflection” before awarding attorney’s fees
that are several times the amount of the actual damages is nothing more than to say
that a comparatively large fee request raises a red flag. . . . [But] while a fee request
that dwarfs the damages award might raise a red flag, measuring fees against
damages will not explain whether the fees are reasonable in any particular case.
Id. at 545-46 (emphasis added).
Thus, proportionality or the lack of it, can be a proper
reasonableness consideration.
At base, then, the issue is whether $23,125.98, i.e., 116.7 attorney hours at $160.00/hour,
13.7 paralegal hours at 60.00/hour, and $3,631.98 in costs, is a reasonable fee for this case.
Plaintiffs’ counsel have submitted affidavits supporting the reasonableness of their hourly rates, and
the number of hours worked seems reasonable for a case that spanned a year, and involved
discovery, two motions to compel, and a summary judgment motion. Moreover, the fact that the
fees exceed the amount recovered does not warrant a reduction in this case. Even if plaintiffs had
prevailed on all of their claims, they would have recovered $5,642.24 in contributions, a small
amount in comparison to their attorney’s fees. But ERISA makes a fee award mandatory in
collection cases, see 29 U.S.C. 1132(g)(2), reflecting Congress’ decision to encourage collection
litigation, even for modest amounts. Defendant may question that wisdom of that decision, but it
is not one the Court may ignore. See Anderson, 578 F.3d at 546 (stating that “fee-shifting statutes
remove th[e] normative decision from the court” of whether “a small claim was ‘worth’ pursuing
at great cost”). Because defendant has not raised any valid objections to plaintiffs’ fee request, the
Court grants it in full.
Conclusion
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For the reasons set forth above, the Court grants plaintiffs’ petition for fees. The Court
orders the parties to file an agreed judgment order that comports with this order and the summary
judgment order on or before November 20, 2014.
SO ORDERED.
ENTERED: November 12, 2014
__________________________________
HON. RONALD A. GUZMAN
United States District Judge
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