International Union of Operating Engineers Local 98 Health and Welfare Fund et al v. S&R Corporation

Filing 119

Judge Michael A. Ponsor: MEMORANDUM AND ORDER entered; granting Plaintiffs' 100 Motion for Attorney's Fees and Costs. To summarize, the amount awarded will be fees and expenses in the amount of $90,424.97 and full reimbursement for t he costs of the audit of $10,149.55, for a total of $100,574.52. Payment will be tendered by Defendant to Plaintiffs within forty-five days of the date of this order, unless Defendant chooses to file a notice of appeal of this decision. It is So Ordered. See the attached memo and order for complete. details. (Lindsay, Maurice)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

INTERNATIONAL UNION OF
OPERATING ENGINEERS LOCAL 98
HEALTH AND WELFARE FUND,
ET AL.,
Plaintiffs,
v.
S&R CORPORATION,
Defendant.

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C.A. No. 12-cv-30192-MAP

MEMORANDUM AND ORDER REGARDING PLAINTIFFS’
MOTION FOR ATTORNEY’S FEES AND COSTS
(Dkt. No. 100)
March 29, 2016
PONSOR, U.S.D.J.
This action has been brought pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”) as amended,
29 U.S.C. §§ 1132(a)(3) & 1145, and the Labor-Management
Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185, to compel
Defendant S&R Corporation to produce unredacted books and
records for audit.1

1

After protracted and vigorous

Plaintiffs are: Barbara Lane, Administrative Fund
Manager of the International Union of Operating Engineers
Local 98 Annuity Fund; Local 98 Pension Fund, Local 98
Health and Welfare Fund, and Local 98 Apprenticeship and
Training Fund; Donald Mason and Eugene Melville, Jr.,
Trustees of the Local 98 Employers Cooperative Trust Fund;
Michael Fanning, the Chief Executive Officer of the Central
Pension Fund; and Eugene Melville, Jr., the Business Manager

resistence by Defendant, the court, on March 23, 2015,
issued its 19-page memorandum allowing Plaintiffs’ Motion
for Partial Summary Judgment.

The court concluded that

“[t]he undisputed facts of record and the law permit only
one conclusion: the auditors require the unredacted records,
and Defendant is obligated to produce them.”

Int’l Union of

Operating Eng’rs Local 98 Health & Welfare Fund v. S&R
Corp., 95 F. Supp. 3d 1, 7 (D. Mass. 2015) (hereinafter S&R
Corp.).
Having found that Defendant was required to comply with
the audit and produce unredacted documents, the court also
stated that “it will award Plaintiffs reasonable attorneys’
fees and costs.”

Id.

On April 30, 2015, Plaintiffs duly filed their Motion
for Attorney’s Fees and Costs, supported by appropriate
affidavits and detailed time records.

Dkt. No. 100.

At

that time, they requested fees and costs in the amount of
$90,010.42, or with adjustments to the hourly rates of
paralegals and associates, $83,239.52.
The affidavit in support of the Motion for Attorney’s
Fees carefully detailed the basis for the claimed hourly
rates, which were within the range approved by the court in
other cases and supported by an independent affidavit.
of the Local 98, AFL-CIO.
2

The

claim for fees properly used the well-established “lodestar”
method to calculate fees.

The rate for paralegals was

reduced to $100 -- a rate the court had approved in previous
cases -- and properly included hours expended in an effort
to avoid litigation prior to filing.

Fees for travel time

were reduced by 50%, and the staff expenses were well
supported.

Based upon this, Plaintiffs’ request for the

adjusted total of $83,239.52, comprising $77,610.05 in fees
and $5,629.47 in costs, was entirely reasonable.
As with every other aspect of this litigation,
Defendant fiercely contested Plaintiffs’ fee claim.

After

moving for extensions of time, Defendant filed, in the form
of responses, oppositions to the claim for fees and costs on
June 19, 2015, and again on July 30, 2015, Dkt. Nos. 106 &
110.
None of the arguments offered challenging the award of
fees was persuasive.

The litigation, particularly given

Defendant’s vigorous opposition, was not so lacking in
complexity as to justify any reduction in the fee.
The equitable considerations identified by Defendant in
its opposition to the fee award lacked force.

Nothing in

the complex negotiations to overcome Defendant’s
unwillingness to produce unredacted financial records
justified reduction in the fees.
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Plaintiffs’ expert

consistently and emphatically took the position that the
unredacted documents were necessary for a proper audit.

S&R

Corp., 95 F. Supp. 3d at 7 (concluding that the
uncontroverted evidence in the record established that
“unredacted documents are necessary for the audit” under
standard professional auditing practices).

Defendant’s

refusal to provide the unredacted documents forced
Plaintiffs to file suit and drove the attorney’s fees up.2
As the court found, Plaintiffs were perfectly correct in
insisting on full disclosure.
On August 17, 2015, Plaintiffs submitted a supplemental
application for attorney’s fees and costs, covering
additional fees incurred by Plaintiffs’ counsel, as well as

2

Notably, it appears from the record that Defendant’s
concern that provoked this litigation was unfounded.
According to Defendant, it sought to redact certain books
and payroll records primarily to keep private certain
information, such as executive pay and charitable and
political contributions, that it asserted was irrelevant to
an inquiry into whether it was fulfilling its pension and
welfare funding duties. However, as attested by the
auditor, William Shannon, it is his practice and the
practice of his firm under standard professional procedures
to "maintain the confidentiality of information contained in
the employer's records unless the information suggests that
the employer owes contributions to the Funds." (Aff. Shannon
¶ 10, Dkt. No. 31, Attach. 4 at 5.) As it turns out, since
the audit (based on the unredacted records) confirmed that
Defendant in fact complied with its contractual obligations,
its sensitive information remained at all times confidential
-- and would have irrespective of this litigation.
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$41.40 in copying expenses, from the time of the initial
application through August 17, 2015, Dkt. No. 111.
Plaintiffs also sought reimbursement of the auditing fee in
the amount of $10,149.55.
As before, Plaintiffs have supported their claim for
additional fees with detailed records, and the fees are
entirely reasonable.

The court therefore will award

additional fees and costs of $7,185.45.
As for the cost of the audit, Defendant challenges the
claimed reimbursement on the basis that the audit revealed
absolutely no improprieties in Defendant’s fulfillment of
its responsibilities under its contracts with Plaintiffs.
Again, its argument is unpersuasive.

Section 2 of the Trust

Fund Collections Policy, entitled "Audit of Payroll
Records," provides that audits generally occur with no
charge to the Employer.

However, it goes on to state

explicitly, "If it is necessary for the Funds' Counsel to
perform legal services for any reason, including the
commencement of a lawsuit..., to obtain the audit and to
compel the Employer's production of its payroll records,
then in that event, the Employer shall be liable for all
auditing fees [as well as attorney's fees and costs]."
Collections Policy, Dkt. No. 31, Attach. 2 at 69-70.

The

irony of this case is, but for this litigation, Defendant
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would not have been responsible for the audit fees; with
this litigation, the trust documents are clear that
Defendant must pay $10,149.55, the auditing costs.
To summarize, the amount awarded will be fees and
expenses in the amount of $90,424.97 and full reimbursement
for the costs of the audit of $10,149.55, for a total of
$100,574.52. Payment will be tendered by Defendant to
Plaintiffs within forty-five days of the date of this order,
unless Defendant chooses to file a notice of appeal of this
decision.
It is So Ordered.
/s/ Michael A. Ponsor
MICHAEL A. PONSOR
U. S. District Judge

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