Bustetter v. CEVA Logistics U.S., Inc.
Filing
39
MEMORANDUM OPINION & ORDER : 1) Def, CEVA's 33 Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART; 2) Pla, Bustetter's 34 Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART; 3) Pla is awa rded statutory penalties in the amount of $6,050.00; 4) This civil action is DISMISSED and STRICKEN from the Court's active docket; and 5) a corresponding Judgment will issue contemporaneously herewith. Signed by Judge David L. Bunning on 12/10/19.(JLS)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION
AT ASHLAND
CIVIL ACTION NO. 18-58-DLB-EBA
LEWIS BUSTETTER
v.
PLAINTIFF
MEMORANDUM OPINION AND ORDER
CEVA LOGISTICS U.S., INC.
DEFENDANT
** ** ** ** ** ** ** **
This matter is before the Court upon the parties’ cross-Motions for Summary
Judgment. (Docs. # 33 and 34). Plaintiff Lewis Bustetter alleges that Defendant CEVA
Logistics U.S., Inc. failed to provide him with documents related to Bustetter’s employeebenefit plans as required under the Employee Retirement Income Security Act (“ERISA”).
(Doc. # 1). Both Motions are fully briefed and are now ripe for the Court’s review.
(Docs. # 35, 36, 37, and 38). For the reasons stated herein, Defendant’s Motion for
Summary Judgment (Doc. # 33) is granted in part and denied in part, and Plaintiff’s
Motion for Summary Judgment (Doc. # 34) is granted in part and denied in part.
I.
FACTUAL AND PROCEDURAL BACKGROUND
This case is a cautionary tale to check and respond to your mail. Plaintiff Lewis
Bustetter is a former employee of Defendant CEVA Logistics U.S., Inc. (“CEVA”). (Doc.
# 33 at 2). During his employment, Bustetter “participated in the CEVA Welfare Benefit
plan” sponsored by CEVA. Id.; see also (Doc. # 35 at 2) (not disputing Bustetter’s
statement that CEVA was the plan sponsor and administrator).
In October 2014,
Bustetter stopped working for CEVA and began receiving disability and life-insurance
1
benefits through CEVA-sponsored plans. (Doc. # 35 at 2). Standard Insurance Company
(“Standard”) was the fiduciary and insurer of the benefit plans. Id.
After twenty-seven months, Standard informed Bustetter that it was terminating his
disability and life-insurance benefits due partially to an amendment to the long-term
disability-benefits policy. (Doc. # 34 at 2). Bustetter challenged the termination in a
separate case before this Court (the “Standard Litigation”). Bustetter v. Standard Ins.
Co., No. 0:18-cv-1-DLB-EBA (filed Jan. 3, 2018). To understand his benefits and rights
and to support his position in the Standard Litigation, Bustetter sent letters to CEVA
requesting information about his benefit plans. (Doc. # 1 at ¶ 10). Specifically, Bustetter
requested:
(1)
Each plan document and summary plan description for each welfare
and pension plans including but not limited to short and long-term disability,
health, life, accident, and retirement. These documents should include
current, as well as past, versions under which the participant accrued and/or
became eligible for benefits.
(2)
Each applicable insurance policy, including certificates of coverage.
(3)
Each administrative manual (or similar document) detailing the
standardized procedures for adjudicating claims and appeals. This request
will apply to documents in the control and possession of any claims
fiduciary.
(4)
All other documents under which the welfare and pension plans are
administered and maintained.
Id. Bustetter alleges that CEVA, as a plan sponsor, must provide him with the requested
information pursuant to ERISA. Id. at ¶ 24 (citing 29 U.S.C. § 1132(a)(1), (a)(3), (c)).
Bustetter sent his first letter to CEVA requesting ERISA plan information via
certified mail on November 20, 2017. Id. at ¶ 11. CEVA received the letter on November
27, 2017 but never responded. (Doc. # 34 at 3). Over the course of the next six months,
2
Bustetter sent four more identical letters to CEVA. (Doc. # 1 at ¶¶ 12–19). On each
occasion, CEVA received Bustetter’s letter but never responded. (Doc. # 34 at 3). CEVA
admits that Bustetter’s five letters “were signed for by a person in the mail room at CEVA’s
corporate headquarters” but “were not routed to the appropriate department at CEVA for
response.” (Doc. # 33 at 3). CEVA does not provide any further explanation for its lack
of response and claims that it has been unable to locate the letters “after a diligent
search.” Id.
On May 11, 2018—165 days after CEVA received Bustetter’s first letter—Bustetter
initiated this action. (Doc. # 1). In his Complaint, Bustetter alleges that CEVA “ignored
[his] multiple requests and failed to provide the requested plan documents” in violation of
29 U.S.C. §§ 1132(a)(1), (a)(3), (c). Id. at ¶ 24. Bustetter asks the Court to award him
all “legal or equitable relief to which he may be entitled,” including statutory penalties for
each day CEVA failed to respond and attorneys’ fees and costs. Id. at ¶¶ 27–29.
On June 7, 2018, CEVA reached out to Bustetter through counsel, “inquire[d] as
to what information [Bustetter] was requesting from CEVA,” and asked for copies of the
letters that Bustetter had originally sent. (Doc. # 33-1 at 1). Bustetter responded that he
would not provide CEVA the requested information until CEVA answered the Complaint.
Id. On June 29, 2018, after filing its answer, CEVA contacted Bustetter’s counsel again
and asked for copies of the letters. (Doc. # 34-1 at 28). CEVA said it was “pleased to
provide whatever documents Mr. Bustetter requests to which he is entitled.” Id. On July
2, 2018, Bustetter’s attorney replied that he would only “respond to [] formal discovery
requests from CEVA.” Id. at 29. Bustetter claims that formal discovery requests were
“necessary to avoid any potential issues that could arise over the production—should
3
motion practice be necessary—and to ensure adherence to the Federal Rules.” (Doc. #
36 at 4). Accordingly, CEVA sent Bustetter Requests for Production on July 13, 2018.
(Doc. # 34-1 at 432–37). Bustetter responded on August 13, 2018 and produced copies
of the letters previously sent to CEVA. Id. at 438–40. On August 27, 2018, CEVA
provided Bustetter with the plan information requested. (Doc. # 34 at 9–10). While
Bustetter claims that CEVA did not fully comply with his requests for information because
CEVA did not provide past versions of plan information and administrative materials, id.
at 8, he has not made any additional discovery requests since receiving the plan
information from CEVA. See generally (Doc. # 34).
On June 24, 2019, CEVA and Bustetter filed cross-Motions for Summary
Judgment. (Docs. # 33 and 34). Both summary-judgment Motions address three main
issues: standing, statutory penalties, and attorneys’ fees and costs.
See generally
(Docs. # 33 and 34). First, CEVA claims that Bustetter lacks standing to bring this action
because he has not proven that he is a participant in a CEVA-sponsored plan. (Doc. # 33
at 4–6). Conversely, Bustetter argues that he is a participant because he has a colorable
claim to vested benefits. (Doc. # 34 at 9–11). Second, CEVA argues that even if the
Court finds that Bustetter does have standing, Bustetter is still not entitled to statutory
penalties. (Doc. # 33 at 6–7). In contrast, Bustetter asks for the maximum statutory
penalties, which he claims is $94,490. (Doc. # 34 at 11–17). Third, the parties dispute
whether Bustetter is entitled to attorneys’ fees and costs. (Doc. # 33 at 8–9); (Doc. # 34
at 17–19). The Court will address each issue in turn.
4
II.
ANALYSIS
A.
Standard of Review
Summary judgment is appropriate when there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P.
56(a). The moving party has the ultimate burden of proof. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). Once a party files a properly supported motion for
summary judgment, by either affirmatively negating an essential element of the nonmoving party’s claim or establishing an affirmative defense, “the adverse party must set
forth specific facts showing that there is a genuine issue for trial.”
Id. at 250.
In
adjudicating a summary-judgment motion, the judge must not weigh the evidence before
the Court, but merely determine whether “there are any genuine factual issues that
properly can be resolved only by a finder of fact because they may reasonably be resolved
in favor of either party.” Id. Speculation is not enough to defeat summary judgment.
Bradley v. Wal-Mart Stores E., LP, 587 F. App’x 863, 866 (6th Cir. 2014). “The mere
existence of a scintilla of evidence in support of the [non-moving party’s] position will be
insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Anderson, 477 U.S. at 252.
“[T]he standard of review for cross-motions of summary judgment does not differ
from the standard applied when a motion is filed by only one party to the litigation.” U.S.
S.E.C. v. Sierra Brokerage Servs., 712 F.3d 321, 327 (6th Cir. 2013) (citing Taft Broad.
Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991)). “[T]he court must evaluate each
party’s motion on its own merits, taking care to draw all reasonable inferences against the
5
party whose motion is under consideration.” Taft Broad. Co., 929 F.2d at 248 (quoting
Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987)).
B.
Standing
As an initial matter, CEVA’s argument that Bustetter lacks standing is a
mischaracterization of the law. Rather, CEVA’s argument is properly characterized as “a
question of whether” Bustetter has a cause of action. Soehnlen v. Fleet Owners Ins.
Fund, 844 F.3d 576, 581 (6th Cir. 2016). Traditionally, courts reviewed the question of
whether a plaintiff had standing through two inquiries: statutory and constitutional. Id.
Statutory standing has since been clarified as “not a standing issue” but rather a question
of whether the plaintiff “has a cause of action under the statute.” Id. (quoting Am.
Psychiatric Ass’n v. Anthem Health Plans, Inc., 821 F.3d 352, 359 (2nd Cir. 2016)); see
also Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 126 (2014).
Here, CEVA’s “standing” argument is based on the statutory language of ERISA.
(Doc. # 33 at 4–6). Thus, CEVA’s standing argument is really an argument that Bustetter
does not have “a cause of action under [29 U.S.C. § 1132(c)]” rather than a constitutional
standing issue. See Soehnlen, 844 F.3d at 581 (quoting Am. Psychiatric Ass’n, Inc., 821
F.3d at 359). Specifically, CEVA claims Bustetter does not have a cause of action
because he is not a participant in or beneficiary of an CEVA-sponsored benefit plan.
(Doc. # 33 at 4–6). Bustetter has the burden to prove that he has a cause of action. See
Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49, 56 (2005); Soehnlen, 844 F.3d at 581.
The Court finds that Bustetter has met his burden and proven beyond dispute that he has
a cause of action.
6
The relevant portion of the ERISA statute, 29 U.S.C. § 1132(c), reads in pertinent
part:
Any administrator . . . who fails or refuses to comply with a request for any
information which such administrator is required by this subchapter to
furnish to a participant or beneficiary1 . . . within 30 days after such request
may in the court’s discretion be personally liable to such participant or
beneficiary in the amount of up to $100 a day from the date of such failure
or refusal.
29 U.S.C. § 1132(c) (emphasis added). A participant is not merely “anyone who claims
to be one.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 118 (1989)). Rather, a
“participant” is:
Any employee or former employee of an employer, or any member or former
member of an employee organization, who is or may become eligible to
receive a benefit of any type from an employee benefit plan which covers
employees of such employer or members of such organization, or whose
beneficiaries may be eligible to receive any such benefit.
Id. § 1002(7). The Supreme Court has interpreted this definition to include “employees
in, or reasonably expected to be in, currently covered employment or former employees
who have a reasonable expectation of returning to covered employment or who have a
colorable claim to vested benefits.”2 Firestone Tire, 489 U.S. at 117–18 (internal citations
and quotations omitted). CEVA and Bustetter appear to agree that Bustetter is neither a
current employee nor a former employee with a reasonable expectation of returning to
A “beneficiary” is “a person designated by a participant, or by the terms of an employee
benefit plan, who is or may become entitled to a benefit thereunder.” Id. at § 1002(8). Neither
party claims that Bustetter is a beneficiary. See (Doc. # 33 at 4–5); (Doc. # 36 at 7–9).
1
Under Sixth Circuit law, it is unclear when a potential participant’s eligibility to benefits is
determined. Compare Jordan v. Tyson Foods, Inc., 312 F. App’x 726, 732 (6th Cir. 2008) (“[T]he
dispute centers on whether [plaintiff] was a participant . . . when he requested the documents at
issue . . . .”), with Morrison v. Marsh & McLennan Co., 439 F.3d 295, 304 (6th Cir. 2006)
(“[E]ligibility is determined at the time that the lawsuit is filed.”). Because the Court finds that
Bustetter was a participant both when he requested the documents from CEVA and when he filed
this action, see infra, the Court need not address this dispute.
2
7
covered employment. See (Doc. # 33 at 6); (Doc. # 34 at 9–11). Instead, the central
question is whether Plaintiff is a former employee with a colorable claim to vested
benefits. See (Doc. # 33 at 6); (Doc. # 34 at 9–11).
Former employees have a colorable claim to vested benefits if they have a
reasonable claim of either “prevail[ing] in a suit for benefits” or “fulfill[ing] eligibility
requirements in the future.” Morrison, 439 F.3d at 303–04 (citing Firestone Tire, 489 U.S.
at 117). A colorable claim “must have some basis in [an ERISA plan] itself.” Teagardener
v. Republic-Franklin Inc. Pension Plan, 909 F.2d 947, 953 (6th Cir. 1990). A claim,
however, may be colorable even if it is ultimately unsuccessful. See Zirnhelt v. Michigan
Consol. Gas Co., 526 F.3d 282, 290 (6th Cir. 2008) (“Even though [plaintiff’s] claim for
benefits failed in the end, she still had a ‘colorable’ claim.”).
Here, the parties agree that Bustetter is a former employee of CEVA but disagree
on whether Bustetter has a colorable claim to vested benefits. See (Doc. # 33 at 6);
(Doc. # 34 at 10). CEVA argues that Bustetter “does not allege that he had any colorable
claim for benefits under the Plan [when he initiated this lawsuit] or assert any facts to
suggest that he had a colorable claim at that time.” (Doc. # 33 at 6). In response,
Bustetter points to the Standard Litigation as evidence that he has a colorable claim to
vested benefits. (Doc. # 34 at 10). Bustetter is correct.
This Court’s recent Memorandum Opinion and Order in the Standard Litigation
removes any doubt of whether Bustetter had a reasonable claim of prevailing in a suit for
benefits. Bustetter v. Standard Ins. Co., No. 0:18-cv-1-DLB-EBA, 2019 WL 4645568
(E.D. Ky. Sept. 24, 2019). There, the Court found that “Standard acted arbitrarily in
denying Bustetter’s claim for . . . benefits.” Id. at *7. While the Court did not find that
8
Bustetter was “clearly entitled” to benefits, the Court held that because Standard acted
arbitrarily and capriciously, the case should be remanded for a “full and fair inquiry.” Id.
at *8 (quoting Elliot v. Metro. Life Ins. Co., 473 F.3d 613, 622 (6th Cir. 2006)). Thus, at a
minimum Bustetter had, and continues to have, a “reasonable claim” that he may “prevail
in a suit for benefits.” Morrison, 439 F.3d 295.
Additionally, the Standard Litigation complaint, which CEVA attached to its Motion
to Stay in this case, is further evidence that Bustetter has a colorable claim to vested
benefits. See generally (Doc. # 22-2). In that case, Bustetter claimed that he continues
to qualify for benefits under CEVA-sponsored plans and detailed how Standard unlawfully
terminated his benefits based on the recommendation of biased medical reviewers and
flawed medical evidence. Id. at 2. Drawing all reasonable inferences in favor of Bustetter,
a finder of fact in this case may conclude that the Standard Litigation complaint supports
a finding that Bustetter has a reasonable claim of prevailing in a suit for benefits.
Accordingly, Bustetter had a colorable claim to vested benefits and is a participant
capable of suing a plan administrator under 29 U.S.C. § 1132(c). Thus, CEVA’s argument
that Bustetter lacks standing is misguided.3
C.
Statutory Penalties
Having established that Bustetter has a cause of action, the Court turns to whether
Bustetter is entitled to a receive a statutory penalty from CEVA under 29 U.S.C. § 1132(c)
Furthermore, CEVA effectively conceded in its Motion to Stay (Doc. # 22) that a finding
that Bustetter had a claim in the Standard Litigation would mean that Bustetter also has a cause
of action against CEVA. (Doc. # 22) (“[T]he outcome of the Standard Litigation will determine
whether Plaintiff has standing to assert his claim in this litigation.”). Because the Court’s holding
in the Standard Litigation shows that Bustetter has a colorable claim to benefits under a CEVAsponsored plan, see supra, by CEVA’s own admission Bustetter has a cause of action in this
matter.
3
9
for failing to timely provide the requested documents. Perhaps predictably, CEVA argues
that the Court should not impose a penalty, (Doc. # 33 at 9), and Bustetter argues for the
maximum penalty, which he claims is $94,490. (Doc. # 34 at 17). Under the facts set
forth herein, the Court finds that a moderate penalty is appropriate.
The purpose of 29 U.S.C. § 1132(c) is “to induce administrators to timely provide
participants with requested plan documents, and to penalize failures to do so.” Bartling
v. Fruehauf Corp., 29 F.3d 1062, 1068 (6th Cir. 1994). Thus, a court “may, but not must,
impose penalties for an employer’s failure to disclose” plan information within 30 days of
receiving a request from a participant. Zirnhelt, 526 F.3d at 290. The maximum penalty
is $110 a day per violation. 29 U.S.C. § 1132(c)(1); 29 C.F.R. § 2575.502c-1 (increasing
the penalty per day from $100 to $110). Courts consider a wide range of factors when
deciding whether to impose a penalty, including whether the plan administrator acted in
bad faith and whether the plan participant was prejudiced, although findings of bad faith
and prejudice are not necessary to impose a penalty. See, e.g., McGrath v. Lockheed
Martin Corp., 48 F. App’x 543, 557 (6th Cir. 2002) (“Even negligence in responding to a
retirement plan participant’s request for plan documents constitutes breach of an ERISA
fiduciary duty.”); Bartling, 29 F.3d at 1067. However, “[m]any courts have refused to
impose any penalty at all under § 1132(c)(1)(B) in the absence of a showing of prejudice
or bad faith.” Bartling, 29 F.3d at 1067–68 (collecting cases).
Here, despite Bustetter’s insistence otherwise, CEVA did not act in bad faith. Bad
faith requires some degree of dishonesty, either in motive or conduct. See generally Bad
Faith, BLACK’S LAW DICTIONARY (11th ed. 2019). The record does not support a finding
that CEVA acted dishonestly or with a dishonest motive. Rather, CEVA admits that its
10
failure to respond was due to negligence; whoever signed for Bustetter’s letters in the
CEVA mailroom did not deliver them to the proper department. (Doc. # 33 at 3). Once
Bustetter initiated this action and CEVA learned of Bustetter’s requests, CEVA promptly
and repeatedly reached out to Bustetter in an attempt to provide him with the plan
information he requested. Id. at 3–4. CEVA did not, as Bustetter claims, “ignore five
separate requests for documents without providing justification.” (Doc. # 34 at 13).
Because CEVA’s failure to respond was due to neglect rather than intentional misconduct,
the Court finds that CEVA did not act in bad faith.
Additionally, CEVA’s inaction did not prejudice Bustetter. Bustetter argues that he
was prejudiced because “CEVA’s actions delayed [his] efforts to obtain his disability
benefits and unnecessarily increased the resources he expended.” (Doc. # 34 at 17).
Bustetter gives five specific examples of how he was prejudiced: (1) he had to expend
resources litigating this action; (2) he did not fully understand his rights prior to filing the
Standard Litigation; (3) he had to expend resources seeking plan documents from
Standard in discovery; (4) the Standard Litigation was delayed because he had to litigate
his discovery requests; and (5) he did not have all the documents at the earlier stages of
the Standard Litigation to address which standard of review applied to his claims. Id. at
16. Bustetter’s argument is misguided.
While CEVA’s inaction did prevent Bustetter from timely obtaining his plan
information, it is unclear the degree to which Bustetter was actually prejudiced by CEVA’s
inaction. This Court in the Standard Litigation held that its decision would be based solely
on the administrative record, (Doc. # 35-2), and found that Bustetter’s discovery requests
for plan documents were irrelevant, Bustetter v. Standard Ins. Co., No. 0:18-cv-1-DLB-
11
EBA, ECF No. 34 at 10 (E.D. Ky. Oct. 23, 2018). Thus, even if CEVA had timely sent
Bustetter his requested plan information, Bustetter likely could not have used the
documents in the Standard Litigation. Accordingly, Bustetter has not demonstrated that
CEVA’s delay in providing him plan documents prejudiced him in the Standard Litigation.
Additionally, if Bustetter was so concerned about obtaining the plan information
from CEVA for use in the Standard Litigation, Bustetter could have filed this action prior
to suing Standard. CEVA received Bustetter’s first letter requesting plan information on
November 27, 2017. (Doc. # 1 at ¶ 11). Under 29 U.S.C § 1132(c), Bustetter could have
sued CEVA for its failure to respond on December 28, 2017, the day after CEVA’s thirtyday window to respond expired. Thus, Bustetter could have filed this action and possibly
received the plan information before he initiated the Standard Litigation on January 3,
2018. (Doc. # 34-1 at 463–66). Instead, Bustetter waited another 134 days and sent
CEVA four more letters before commencing this action on May 11, 2018. (Doc. # 1).
While Bustetter’s choice to wait was lawful, his choice appears inconsistent with his
concern that not having the documents from CEVA would prejudice him in the Standard
Litigation. Bustetter could have greatly mitigated any potential prejudice he may have
faced by filing this action after CEVA failed to respond to his first letter and before initiating
the Standard Litigation.
Moreover, Bustetter has also not acted with the urgency of a party eager to obtain
the plan information from CEVA throughout this litigation. Bustetter admits that CEVA
contacted Bustetter on June 7, 2018 and asked for copies of the letters he sent.
(Doc. # 36 at 2–3). Bustetter told CEVA that he would not provide CEVA with information
until CEVA filed an Answer. Id. After CEVA answered, CEVA’s counsel again asked
12
Bustetter for copies of the letters and said that “CEVA is pleased to provide whatever
documents Mr. Bustetter requests to which he is entitled.” (Doc. # 33-4). Rather than
provide CEVA with copies of the letters to expedite receiving his plan information,
Bustetter replied that he would only “respond to any formal discovery requests from
CEVA.” (Doc. # 34-1 at 29). Bustetter then waited thirty days—the maximum time
allowed under FED. R. CIV. P. 34(b)(2)(A)—to respond to CEVA’s subsequent Requests
for Production. Id. at 432–40. While Bustetter has acted within the parameters of the
law, he has not acted like a party who is worried that he would be prejudiced by CEVA’s
delay. In a situation like this where the statutory penalty is calculated per diem, the Court
is skeptical of Bustetter’s claim of prejudice when Bustetter could have expedited the
process but instead pursued more time-consuming options. Accordingly, the Court finds
that Bustetter was not prejudiced by CEVA’s inaction.
Nevertheless, some amount of penalty is necessary to “induce administrators [like
CEVA] to timely provide participants with requested plan documents, and to penalize
failures to do so.” Bartling, 29 F.3d at 1068. Considering, inter alia, CEVA’s negligence,
Bustetter’s actions, the length of delay, and CEVA’s willingness to cooperate once it
learned of Bustetter’s requests, the Court concludes that a $25 per day penalty will
achieve the purposes of 29 U.S.C. § 1132(c). See Daniel v. Eaton Corp., 839 F.2d 263,
268 (6th Cir. 1988) (affirming a penalty of $25 per day where the defendant’s failure
resulted from neglect or misfeasance and “the record cast[] doubt on any claim of
prejudice”); see also Kanoski v. Sterling Paper Co., No. 2:09-CV-0439, 2014 WL
1384159, at *6 (S.D. Ohio Apr. 9, 2014) (collecting cases from sister courts and the 6th
Circuit awarding penalties ranging from $25 to $60 per day in similar factual scenarios).
13
Bustetter is entitled to penalties beginning December 28, 2017, which is thirty-one days
after CEVA received Bustetter’s first request for plan information. See (Doc. # 34-1 at 6).
CEVA provided Bustetter the requested plan information on August 27, 2018.4 Id. at 30–
31. Thus, CEVA is subject to a $25 per diem penalty for 242 days5 for a total amount of
$6,050.6
D.
Attorneys’ Fees and Costs
Finally, Bustetter asks for attorneys’ fees and costs or, alternatively, an opportunity
to file a separate motion to “address[] in greater detail the requisite factors and provide[]
the necessary documentation.”
(Doc. # 34 at 17–19).
CEVA opposes Bustetter’s
request.7 (Doc. # 33 at 8–9). The Court finds that further briefing on the issue is
unnecessary; Bustetter is not entitled to attorneys’ fees.
Bustetter maintains that the documents CEVA provided on August 27, 2018 did not “fully
respond to [his] requests” because CEVA did not include past versions of the plan documents
and administrative manuals for operating the plans. (Doc. # 34 at 10). In his Motion for Summary
Judgment, however, Bustetter uses August 27, 2018 as the cut-off date to calculate penalties,
and he has not filed any further discovery requests since August 27, 2018. Id. As such, the Court
will limit its penalty calculations to the time before August 27, 2018.
4
Bustetter claims that CEVA is subject to penalty for a maximum of 243 days. (Doc. # 34
at 8). Based on a plain reading of 29 U.S.C. § 1132(c), however, the Court will not count August
27, 2018, which is the day that CEVA complied. See id.
5
Bustetter asks the Court to “stack” penalties and award penalties based on each of the
five letters he sent to CEVA. While the parties strongly dispute this issue, neither side cited
binding precedent supporting their position. (Doc. # 33 at 6–7); (Doc. # 34 at 11–12). Without
deciding whether stacking may be appropriate in some cases, the Court, in its discretion, declines
to award penalties for each identical request made in this case. See Bartling, 29 F.3d at 1069
(“[T]he result is no different than if the court had exercised its discretion to award $323 per plaintiff,
or $1.28 per plaintiff/per document/per day, rather than $100 per document/per day to be split
between all the plaintiffs.”); see also Mondry v. Am. Family Mut. Ins. Co., 497 F. App’x 603, 610–
11 (7th Cir. 2012) (finding that the district court was within its discretion to not stack penalties
where the defendant did not act in bad faith and the plaintiff was not prejudiced).
6
7
CEVA did not ask for attorneys’ fees or costs for itself. See (Doc. # 33 at 8–9).
14
In an action by a plan participant, the Court “may allow a reasonable attorney’s fee
and costs action to either party.” 29 U.S.C. § 1132(g)(1) (emphasis added); accord First
Trust Corp. v. Bryant, 410 F.3d 842, 851 (6th Cir. 2005). Section 1132 “confers broad
discretion on [the Court] in making an award of attorney’s fees in an ERISA action.”
Schwartz v. Gregori, 160 F.3d 1116, 1119 (6th Cir. 1998).
Furthermore, there is no
“presumption that attorney[] fees should ordinarily be awarded to the prevailing plaintiff.”
Shelby Cty. Health Care Corp. v. Majestic Star Casino, LLC, 581 F.3d 355, 376–77 (6th
Cir. 2009) (alteration in original) (quoting First Trust Corp. v. Bryant, 410 F.3d 842, 851
(6th Cir. 2005)). Rather, the Sixth Circuit has established five factors the Court must
consider in determining an award of fees under ERISA:
(1) the degree of the opposing party's culpability or bad faith; (2) the
opposing party's ability to satisfy an award of attorney's fees; (3) the
deterrent effect of an award on other persons under similar circumstances;
(4) whether the party requesting fees sought to confer a common benefit on
all participants and beneficiaries of an ERISA plan or resolve significant
legal questions regarding ERISA; and (5) the relative merits of the parties'
positions.
Secretary of Dep't of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985); accord Moon v.
UNUM Provident Corp., 461 F.3d 639, 642 (6th Cir. 2006).8 “Because no single factor is
determinative, the court must consider each factor before exercising its discretion."
Schwartz, 160 F.3d at 1119. These factors are not statutory, however, and are not
Instead of applying these five factors, CEVA argues that the Court should consider two
factors: (1) Bustetter’s “conduct in refusing to respond to counsel for CEVA’s repeated requests
to set forth what documents he was seeking”; and (2) “his actions in hindering the settlement of
this action.” (Doc. # 33 at 8–9) (citing multiple out-of-circuit opinions). Since CEVA did not cite
any binding precedent to suggest that the Court should consider settlement negotiations, the
Court declines to do so. The Court will consider Bustetter’s conduct to the extent that it is relevant
to the factors articulated by the Sixth Circuit.
8
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dispositive. First Trust Corp. 410 F.3d at 851. “Rather, they are simply considerations
representing a flexible approach.” Id. The Court will evaluate each in turn.
The first factor concerns the degree of the opposing party's culpability or bad faith.
Because CEVA did not act in bad faith, see supra, this factor weighs against awarding
Bustetter attorneys’ fees.
The second factor, however, favors awarding Bustetter
attorneys’ fees because CEVA, as a large corporation, likely has the ability to satisfy an
award of fees and costs. See (Doc. # 34 at 18).
The third factor—the deterrent effect of a fee award on other plan administrators—
weighs against Bustetter. “Deterrence ‘is likely to have more significance in a case where
the defendant is highly culpable’ or where ‘deliberate misconduct is in the offing.’” Geiger,
549 F. App’x at 339 (quoting Foltice, 98 F.3d at 937). Since the Court has already found
that CEVA was merely negligently rather than highly culpable, see supra, it follows that
awarding attorneys’ fees and costs in this case would not have a deterrent effect.
Furthermore, the statutory penalty here will provide sufficient deterrence.
The fourth factor—whether the party requesting fees sought to confer a common
benefit on all participants—likewise weighs against awarding Bustetter fees. To prevail
on this factor, Bustetter must show that by bringing the lawsuit, (1) he “[sought] to obtain
a common benefit for all of the participants in [CEVA’s] plan” and (2) that other participants
in the plan were similarly situated. See Gaeth v. Hartford Life Ins. Co., 538 F.3d 524, 533
(6th Cir. 2008). Bustetter has not made such a showing. Additionally, it is unlikely that
awarding attorneys’ fee would, as Bustetter claims, entice CEVA to take requests for plan
information from other participants more seriously because CEVA acted negligently, not
16
intentionally. (Doc. # 34 at 21). Therefore, this factor counsels against awarding Bustetter
attorneys’ fees and costs.
The fifth and final factor concerns the relative merits of the parties’ positions.
Undoubtedly, CEVA is at fault for negligently failing to respond to Bustetter’s requests for
plan information.
Bustetter himself, however, is not entirely blameless.
Bustetter
repeatedly refused to cooperate with CEVA’s informal attempts to provide Bustetter with
the plan documents he sought, increasing the number of days it took CEVA to provide
Bustetter with the plan information and thereby increasing the amount of any potential
penalty. In such a situation, the merits weigh only moderately in Bustetter’s favor.
In conclusion, three out of the five factors weigh against awarding Bustetter
attorneys’ fees and costs. On balance, the two factors favoring Bustetter—CEVA’s ability
to pay and the relative merits of each parties’ position—are not enough to warrant
attorneys’ fees. Accordingly, Bustetter’s request for attorneys’ fees and costs is denied.
III.
CONCLUSION
For the reasons state herein, IT IS ORDERED that:
(1)
Defendant CEVA Logistics U.S., Inc.’s Motion for Summary Judgment
(Doc. # 33) is GRANTED IN PART and DENIED IN PART;
(2)
Plaintiff Lewis Bustetter’s Motion for Summary Judgment (Doc. # 34) is
GRANTED IN PART and DENIED IN PART;
(3)
Plaintiff is awarded statutory penalties in the amount of $6,050.00;
(4)
This civil action is hereby DISMISSED and STRICKEN from the Court’s
active docket; and
(5)
A corresponding Judgment will be issued contemporaneously herewith.
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This 10th day of December, 2019.
K:\DATA\ORDERS\Ashland Civil\2018\18-58 MOO re MSJs.docx
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