Utecht et al v. Diamond Lake, Inc.
Filing
45
MEMORANDUM OPINION AND ORDER granting 30 Plaintiffs' Motion for Summary Judgment. (Written Opinion) Signed by Chief Judge John R. Tunheim on 12/29/2017. (JMK)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
MATT UTECHT and KENT DIXON,
Trustees of the Minneapolis Retail Meat
Cutters and Food Handlers Pension Plan,
Plaintiffs,
v.
Civil No. 16-118 (JRT/FLN)
MEMORANDUM
OPINION AND ORDER
GRANTING PLAINTIFFS’ MOTION
FOR SUMMARY JUDGMENT
DIAMOND LAKE, INC.,
Defendant.
Amanda R. Cefalu and Bryan J. Morben, KUTAK ROCK, 60 South Sixth
Street, Suite 3400, Minneapolis, MN 55402, for plaintiffs.
David E. Krause, DAVID E. KRAUSE LAW OFFICE, 2716 Colfax
Avenue South, Minneapolis, MN 55408, for defendant.
The trustees of the Minneapolis Retail Meat Cutters and Food Handlers Pension
Plan (“the Plan”) brought this Employee Retirement Income Security Act (“ERISA”)
case against Diamond Lake, Inc. (“Diamond Lake”), a Minneapolis supermarket that
withdrew from the Plan when it went out of business in 2013. The Plan brings this action
for collection, alleging that Diamond Lake defaulted on withdrawal liability payments
that the Plan properly determined and scheduled under ERISA. Now before the Court is
the Plan’s Motion for Summary Judgment. The Plan argues that Diamond Lake waived
its right to contest liability by failing to demand arbitration within the timeframe required
by the statute. Diamond Lake responds that it was not required to do so because the Plan
never completed the determination process.
In keeping with the plain language of
ERISA, the Court will find that the Plan’s failure to respond to Diamond Lake’s letter
requesting review did not excuse Diamond Lake from the arbitration demand deadline.
Diamond Lake also requests equitable relief, which the Court will decline to grant.
Because Diamond Lake does not contest the other elements required for the Plan to
prevail in this action, the Court will grant the Plan’s Motion for Summary Judgment.
BACKGROUND
The Plan is a multiemployer benefit plan administered in accordance with ERISA.
(Compl. ¶ 1, Jan. 19, 2016, Docket No. 1.) Diamond Lake is a Minnesota corporation
that operated Sullivan’s SuperValu for nearly 30 years until going out of business in
2013. (Decl. of John H. Sullivan, III (“Sullivan Decl.”) ¶¶ 1-2, May 18, 2017, Docket
No. 37.) When Diamond Lake was in business, it made contributions to the Plan on
behalf of employees who were members of United Food & Commercial Workers Union
District Local 653. (Id. ¶¶ 3, 6). On January 25, 2013, after laying off those employees,
it sold its remaining non-cash assets and made its final contributions to the Plan. (Id.
¶¶ 4, 6-7.) This was a “complete withdrawal” under ERISA. See 29 U.S.C. § 1383(a).
On July 22, 2013, the Plan sent Diamond Lake a letter stating that its withdrawal
liability (calculated using the ERISA statutory formula) was $588,361. (Sullivan Decl.
¶ 8; Decl. of David E. Krause (“Krause Decl.”) ¶¶ 2-3, Ex. A. at 1, May 18, 2017, Docket
No. 38.) The letter explained that Diamond Lake had the right to request review of the
Plan’s calculations within 90 days, though it was required to begin payment either way.
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(Krause Decl. ¶ 2, Ex. A at 2.) On August 26, Diamond Lake responded with a letter
from counsel contending that it was not subject to withdrawal liability because ERISA
limits such liability to a percentage of a company’s liquidation value, which for Diamond
Lake was negative. (Sullivan Decl. ¶ 10; Krause Decl. ¶ 4, Ex. B at 1-2.) The letter
stated that it was sent “pursuant to 29 U.S.C. § 1399(b)(2)(A),” the statutory provision
allowing an employer to request review, identify an inaccuracy, or furnish additional
relevant information. (Krause Decl. ¶¶ 4-5, Ex. B. at 1-2.) The letter did not explicitly
request review, but stated that “Diamond Lake is submitting the information in this letter
for the Trustee’s consideration in determining whether Diamond Lake has any
withdrawal liability to the Plan.” (Krause Decl. ¶ 4, Ex. B. at 1.) Diamond Lake
received no response. (Krause Decl. ¶¶ 4, 6-7, Ex. B. at 1-2.)
Under the Plan’s schedule, Diamond Lake’s first payment was due on September
23, 2013. (Aff. of Bryan J. Morben (“Morben Aff.”) ¶ 2, Ex. A at 4-5, Apr. 27, 2017,
Docket No. 33.) Diamond Lake did not make that payment, or any others. (Id. at 5.) On
January 23, 2015, the Plan notified Diamond Lake that it would be in default if it did not
cure its failure to pay within 60 days. (Aff. of Susan Knoblauch (“Knoblauch Aff.”)
¶¶ 8-9, Ex. 2 at 1, Apr. 29, 2016, Docket No. 15.) The Plan filed this action a year later,
serving Diamond Lake via the Minnesota Secretary of State. (Compl.; Summons, Jan.
29, 2016, Docket No. 4.) Diamond Lake did not respond, and the Clerk entered default.
(Clerk’s Entry of Default, Mar. 25, 2016, Docket No. 8.) When the Plan subsequently
moved for default judgment, Diamond Lake filed its Answer, and the entry of default was
vacated and set aside. (Pls.’ Mot. Default J., Apr. 29, 2016, Docket No. 11; Ans., May
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27, 2016, Docket No. 20; Order, June 1, 2016, Docket No. 21.) Ten months later, the
Plan filed the Motion for Summary Judgment that is now before the Court. (Pls.’ Mot.
Summ. J., Apr. 27, 2017, Docket No. 30.)
DISCUSSION
I.
STANDARD OF REVIEW
Summary judgment is appropriate where there are no genuine issues of material
fact and the moving party can demonstrate that it is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the
lawsuit, and a dispute is genuine if the evidence is such that it could lead a reasonable
jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). A court considering a motion for summary judgment must view the facts in
the light most favorable to the non-moving party and give that party the benefit of all
reasonable inferences to be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
Summary judgment is appropriate if the
nonmoving party “fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “To defeat a motion
for summary judgment, a party may not rest upon allegations, but must produce probative
evidence sufficient to demonstrate a genuine issue [of material fact] for trial.” Davenport
v. Univ. of Ark. Bd. of Trs., 553 F.3d 1110, 1113 (8th Cir. 2009).
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II.
WITHDRAWAL LIABILITY
A. Legal Background
The Employee Retirement Income Security Act (“ERISA”) of 1974 “helped assure
private-sector workers that they would receive the pensions that their employers had
promised them.” Milwaukee Brewery Workers’ Pension Plan v. Joseph Schlitz Brewing
Co., 513 U.S. 414, 416 (1995). But the law’s requirement that employers who had
withdrawn from an insolvent plan in the five years prior to insolvency pay a fair share of
the plan’s underfunding perversely incentivized employers to withdraw from financially
shaky plans. Id. The Multiemployer Pension Plan Amendments Act (“MPPAA”) of
1980 sought to fix the problem by requiring employers that withdraw from underfunded
multiemployer pension plans to pay withdrawal liability. Id. at 415-16.
Under the amended statute, withdrawal liability is created by an employer’s partial
or complete withdrawal from a multiemployer plan. 29 U.S.C. § 1381(a). Complete
withdrawal occurs when an employer permanently ceases to have an obligation to
contribute under the plan, or permanently ceases all covered operations under the plan.
Id. § 1383(a). Withdrawal liability is calculated according to a statutory formula that
considers the plan’s total underfunding, the employer’s fair share, certain de minimis
reductions, and other limitations on liability. See id. §§ 1391, 1389, 1405.
“As soon as practicable” after withdrawal, the plan sponsor is obligated to
determine the employer’s withdrawal liability, notify the employer of the amount due,
provide a payment schedule, and demand payment in accordance with it.
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Id.
§§ 1399(b)(1), 1382. Within 90 days of receiving this determination, the employer “may
ask the plan sponsor to review any specific matter” in the determination and payment
schedule, “identify any inaccuracy,” and “furnish any additional relevant information to
the plan sponsor.” Id. § 1399(b)(2)(A). “After a reasonable review of any matter raised,
the plan sponsor shall notify the employer of” its decision, the basis for it, and the reason
for any changes. Id. § 1399(b)(2)(B).
In a separate section, the statute provides that disputes between employers and
plan sponsors “shall be resolved through arbitration.
Either party may initiate the
arbitration proceeding within a 60-day period after the earlier of (A) the date of
notification to the employer under section 1399(b)(2)(B) of this title, or (B) 120 days
after the date of the employer’s request under section 1399(b)(2)(A) of this title.” Id.
§ 1401(a)(1) (emphases added). The Eighth Circuit explains: “Either party may initiate
arbitration proceedings within 180 days of an employer’s timely request to the plan
sponsor for a review of the determination of amount due or within 60 days of the plan
sponsor’s notification to the employer of its decision after such review, whichever is
earlier.” Vaughn v. Sexton, 975 F.2d 498, 501 (8th Cir. 1992) (emphasis added). 1
If neither party initiates arbitration, the statute provides that the plan sponsor’s
determination and payment schedule become final and allows the sponsor to bring a state
or federal court action for collection. 29 U.S.C. § 1401(b)(1). Any factual defenses that
1
Accord Robbins v. Chipman Trucking, Inc., 866 F.2d 899, 901 (7th Cir. 1988) (holding
that arbitration commenced more than 180 days after the employer’s request for review was
barred, even though it commenced within 60 days of the employer’s receipt of the plan sponsor’s
notification in response).
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could have been raised in arbitration are waived when the arbitration demand period
closes. Vaughn, 975 F.2d at 501-02. The strictness of the arbitration demand deadline
and severity of the consequences that follow a failure to abide by it are well-known:
From the perspective of the withdrawing employer, the initial notice of an asserted
withdrawal liability should trigger prompt and intensive examination of the
background of the plan’s collection attempt. A casual response by a recipient of
a withdrawal liability assessment can be disastrous. . . . The courts are in
general agreement in virtually all withdrawal circumstances that an employer’s
delay in requesting arbitration waives the employer’s defenses and right to contest
the withdrawal liability.
3 ERISA Practice and Litigation § 12:11 (emphasis added).
Finally, even if an employer contests the plan sponsor’s determination, it must pay
on the sponsor’s schedule unless and until it wins revision. Payment must begin no later
than 60 days after the sponsor’s demand “notwithstanding any request for review or
appeal of determinations of the amount of such liability or of the schedule.” 29 U.S.C.
§ 1399(c)(2). Timely payments must even be made during arbitration, with adjustments
to be made after the fact. Id. § 1401(d). If the employer defaults, the plan sponsor may
demand immediate payment of the entire amount owed, plus interest. Id. § 1399(c)(5).
B. Application
To prevail in this case, the Plan must show that (1) it was a multiemployer pension
plan and that Diamond Lake was an employer for the purposes of ERISA, (2) that
Diamond Lake was in the Plan and completely withdrew from it, (3) that the Plan
calculated and notified Diamond Lake of its assessed withdrawal liability, (4) that
Diamond Lake failed to timely initiate arbitration, and (5) that Diamond Lake defaulted
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on its payments. See 29 U.S.C. § 1401; Reed v. Curry Concrete Const., Inc., No. 104329, 2011 WL 2015217, at *3 (D. Minn. May 23, 2011).
None of these elements are in dispute. The Plan was a multiemployer pension
plan and Diamond Lake was an employer under ERISA. Diamond Lake completely
withdrew from the Plan. The Plan notified Diamond Lake under Section 1399(b)(1),
Diamond Lake sent the Plan a letter “pursuant to Section 1399(b)(2)(A),” the Plan did not
respond to that letter, and Diamond Lake did not demand arbitration. The plain language
of the statute and the Eighth Circuit’s reading of it in Vaughn therefore dictate the
outcome of this case. An arbitration demand must be made no later than 180 days after
an employer’s request for review or 60 days after the sponsor’s response – whichever
comes first. An employer that fails to meet that deadline waives its right to challenge a
determination. Diamond Lake failed to meet that deadline; therefore, Diamond Lake
waived its right to challenge the Plan’s determination and payment schedule.
Diamond Lake creatively contends that the Plan’s failure to respond to its letter as
required by Section 1399 2 means there was never actually “a determination made under
sections 1381 through 1399 of this title,” and so the arbitration demand deadline was
never triggered in the first place. 3 Vaughn suggests Diamond Lake waived this argument.
There, an employer’s failure to request arbitration foreclosed it from litigating whether a
plan sponsor failed to comply with the requirement that it notify the employer “as soon as
2
“After a reasonable review of any matter raised, the plan sponsor shall notify the
employer” in response. 29 U.S.C. § 1399(b)(2)(B) (emphasis added).
3
Diamond Lake’s case turns on this strained construction of the statute, but it provides no
authority in support of its view – and the Court has found none.
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practicable” after withdrawal. 975 F.2d at 501-02 (holding that the issue was a factual
dispute, not a question of statutory interpretation). Even if the argument is not waived,
however, it makes no difference here. Both the plain language of the statute and the
Eighth Circuit’s decision in Vaughn foreclose Diamond Lake’s interpretation.
Even if “determination” or “a determination made under sections 1381 through
1399 of this title” were ambiguous, the statute as a whole makes the most sense if they
are read to refer to the plan sponsor’s initial determination. Section 1381 sets out how a
determination is to be made, referring to required calculations in various subsequent
sections.
Section 1382 requires the plan sponsor to determine the amount of the
employer’s liability. Section 1399, which allows an employer to request review, uses the
phrase “the determination” to mean the initial determination. And both Sections 1399
and 1401 use the phrase to refer to the initial determination unless and until that
determination is modified by the plan sponsor or arbitrator.
Likewise, the Eighth Circuit referred to the phrase “a determination made under
sections 1381 to 1399” immediately prior to its discussion of Section 1401(a)(1)(A), the
“employer’s timely request to the plan sponsor for a review of the determination of
amount due.” Vaughn, 975 F.2d at 501. This shows that the Eighth Circuit understands
the relevant “determination” to be the plan sponsor’s initial determination; a plan
sponsor’s subsequent response to an employer’s request for review is called a
“notification.” Id. And the Eighth Circuit’s phrase “whichever is earlier” shows that the
notification is only relevant if it comes no more than 120 days after that request. See id.
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III.
EQUITABLE RELIEF
Diamond Lake asks that the Court preclude the Plan from arguing that the
arbitration demand period expired, invoking two “great maxims of equity” – that equity
“will not suffer a wrong without a remedy,” and that “a party cannot take an
unconscionable advantage of its wrong by asserting its strict legal rights.” (Def.’s Mem.
Opp. Mot. Summ. J. at 7-8, May 18, 2017, Docket No. 36.) Specifically, Diamond Lake
contends that the Plan’s determination letter represented that it would respond to any
submission from Diamond Lake, and that the Plan’s failure to do so therefore reversed
the Plan’s own previous position and violated the law. 4
Equitable estoppel prohibits “a party who has full knowledge of the facts from
accepting the benefits of a transaction, contract, or order and subsequently taking an
inconsistent position to avoid corresponding obligations.” Total Petroleum, Inc. v. Davis,
822 F.2d 734, 737 (8th Cir. 1987). For example, one out-of-circuit district court applied
the doctrine when a plan sponsor acted in a manner “that was intentionally misleading
and in bad faith.” Central States, Se. and Sw. Areas Pension Fund v. Premarc Corp.,
1994 WL 457170, at *3-*4 (N.D. Ill. Aug. 22, 1994) (finding that ignoring an employer’s
timely letter following up on its request for review “constituted active concealment”).
Diamond Lake’s claim that the Plan acted in bad faith by “representing . . . that
they would act on” any objections is unpersuasive. First, the Plan’s letter contains no
4
This Section assumes without deciding that this argument raises a question of law that
was not waived by Diamond Lake’s failure to arbitrate.
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clear statement to that effect. Second, the Plan’s letter explained that ERISA required
Diamond Lake to make timely payments regardless of whether it requested review, and
Diamond Lake failed to do so – undermining the claim that it was acting in reliance on
representations in the letter. Finally, because Diamond Lake never followed up, the Plan
cannot be said to have taken measures constituting “active concealment.” Equitable
estoppel is not justified here.
Equitable tolling may protect a litigant who establishes both “(1) that he has been
pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his
way and prevented timely filing.” Menominee Indian Tribe of Wis. v. United States, 136
S. Ct. 750, 755 (2016). While no Eighth Circuit cases are directly on point, decisions in
other circuits are instructive. The Seventh Circuit affirmed a district court’s application
of equitable tolling when an employer had “moved decisively to present the issue in
court,” rather than to an arbitrator, “within the statutory time period for arbitration.” 5
Banner Indus., Inc. v. Cent. States, Se. & Sw. Areas Pension Fund, 875 F.2d 1285, 129394 (7th Cir. 1989). Citing Banner Industries, the Second Circuit found that an employer
“did not protect its right to arbitration by moving decisively” when it answered a
complaint in federal court promptly, but “did not move for a stay pending arbitration” or
make payments pending resolution of the dispute. Bowers v. Transportacion Maritima
Mexicana, S.A., 901 F.2d 258, 264-65 (2d Cir. 1990).
5
This conclusion is not self-evident. The Fourth Circuit flatly held that “[t]he doctrine of
equitable tolling is inapplicable in MPPAA cases” because it “undercuts the purpose of the
statute, the timely adjudication of withdrawal liability disputes to insure the security of
multiemployer plans.” McDonald v. Centra, Inc., 946 F.2d 1059, 1065 (4th Cir. 1991).
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District courts have denied equitable tolling even in cases where a plan sponsor
asked an employer for additional documents to review shortly before the arbitration
demand deadline expired or represented to the employer that it might decrease an
assessment. Pension Plan for Pension Tr. Fund for Operating Eng’rs. v. Weldway
Const., Inc., 920 F. Supp. 2d 1034, 1046-47 (N.D. Cal. 2013); Trustees of Soft Drink
Indus.-Local Union No. 744 Pension Fund v. Royal Crown Bottling Co., No. 08-C-502,
2009 WL 310896, at *3 (N.D. Ill. Feb. 9, 2009). “Defendants are presumed to be aware
of the law.” Weldway Const., 920 F. Supp. 2d at 1047.
Here, Diamond Lake does not make out a prima facie case for tolling the statute of
limitations because it does not allege extraordinary circumstances. 6 Nor may it be said
that Diamond Lake moved decisively toward arbitration. The sole action it took to
pursue its rights was to write the Plan a letter. Although the letter requested a response,
Diamond Lake never followed up on that request. Indeed, it did nothing at all for over
two years – it did not even file an answer in this action until the Plan filed for default
judgment. Equitable tolling is not justified here.
The Court will grant the Plan’s Motion for Summary Judgment.
IV.
LIABILITY
The final remaining issue is that of Diamond Lake’s total liability. The Plan
requests $588,361 in withdrawal liability, $64,679.86 in accrued interest, $58,836.10 in
6
Cf. Cent. States, Se. & Sw. Areas Pension Fund v. Slotky, 956 F.2d 1369, 1376 (7th Cir.
1992) (suggesting that tolling might be justified if an employer’s sole shareholder suffered “a
disabling stroke the day the pension plan gave notice”).
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liquidated damages, and $16,987.29 in costs and fees, for a total of $728,864.25. (Pls.’
Mem. Supp. Mot. Summ. J. (“Supp.”) at 9-11, Apr. 27, 2017, Docket No. 32.)
The civil enforcement section of the MPPAA statute mandates that “any failure of
the employer to make any withdrawal liability payment within the time prescribed shall
be treated in the same manner as a delinquent contribution.” 29 U.S.C. § 1451(b). The
ERISA section on civil enforcement of delinquent contributions provides that, in an
action “in which a judgment in favor of the plan is awarded, the court shall award the
plan” the unpaid contributions, interest, liquidated damages not in excess of 20 percent,
and reasonable attorney’s fees and costs. Id. § 1132(g)(2). It further provides that
interest “shall be determined by using the rate provided under the plan, or, if none, the
rate prescribed under section 6621 of title 26.” Id. 1132(g). Here, the Plan Agreement
set liquidated damages at 10%, interest on missed payments at 8% per annum, and
requires delinquent employers to “pay all court costs including reasonable attorney
fees.” 7 (Knoblauch Aff. ¶ 11, Ex. 3, § 4.5.)
The Plan’s withdrawal liability figure matches the Plan’s original determination,
and does not include amortized interest. (See Knoblauch Aff. ¶ 5, Ex. 1, at 1.) The Plan
Agreement set liquidated damages at 10%. (Id. ¶ 11, Ex. 3, § 4.5.) The Court finds that
the Plan’s withdrawal liability and liquidated damages requests are appropriate.
7
Section 4.5 of the Plan Agreement regards “Contributions to the Trust Fund,” but again,
under Section 1451(b), an employer’s failure to make withdrawal liability payments is to be
treated in the same manner as a delinquent contribution. See GCIU-Employer Ret. Fund v.
Quad/Graphics, Inc., No. 216-CV-100, 2017 WL 1903102, at *5 (C.D. Cal. May 8, 2017).
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With regard to interest, the Plan submits that interest on overdue and defaulted
withdrawal liability is calculated from the first day of the plan year following withdrawal
(citing Schlitz Brewing, 513 U.S. at 431) in accordance with the standard rates in Pension
Benefit Guaranty Corporation (“PBGC”) regulations (citing 29 C.F.R. § 4219.32). The
Plan’s request appears to be calculated based on the law for interest payments prior to
default or enforcement action. See 29 U.S.C. §§ 1399(c)(1)(A)(i), (c)(6). In light of
Diamond Lake’s default, however, the Plan is entitled to interest calculated “from the due
date of the first payment which was not timely made.” 8 Id. § 1399(c)(5); see also 29
C.F.R. § 4219.32(d). And, in light of the fact that this Court will award judgment for the
Plan, it is entitled to the plan-provided rate of 8% per annum. 29 U.S.C. § 1132(g)(2).9
As such, the Court calculates Diamond Lake’s interest obligation from September 23,
2013, to the date of judgment as $188,275.52. 10
8
Section 1132(g) does not designate the point from which interest should be charged.
9
The Court acknowledges that district courts differ on whether civil actions are governed
by 29 U.S.C. § 1132(g)(2) or by 29 U.S.C. § 1399(c)(6) and 29 C.F.R. § 4219.32(b). The Court
will join those concluding that it is the former. Quad/Graphics, Inc., 2017 WL 1903102, at *6
(collecting cases and concluding that the latter “applies only where overdue withdrawal
payments are collected before litigation commences”); Trustees of Local 813 Pension Tr. Fund
v. Frank Miceli Jr. Contracting, Inc., No. 13CV198, 2017 WL 972104, at *1 n.2 (E.D.N.Y. Mar.
13, 2017) (collecting cases and concluding the opposite). In this case, it might not make any
difference. See 29 C.F.R. § 4219.32(b) (establishing rates “[e]xcept as otherwise provided in
rules adopted by the plan pursuant to § 4219.33”); id. § 4219.1 (explaining that Subpart C, which
includes Sections 4219.31-33, establishes a rule for employers who have defaulted under
§ 1399(c)(6), but also authorizes plans to adopt alternative rules). Because the Court concludes
that 29 U.S.C. § 1132(g)(2) controls here, it need not determine whether Section 4.5 of the Plan
Agreement was adopted “pursuant to § 4219.33.”
10
The Court awards four years of simple interest rather than compound interest in
recognition of the fact that this award is significantly higher than the Plan’s request.
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To determine reasonable attorneys’ fees, a court starts with the lodestar: “the
number of hours reasonably expended on the litigation multiplied by a reasonable hourly
rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). “Where the documentation of
hours is inadequate, the district court may reduce the award accordingly.” Id.; H.J. Inc. v.
Flygt Corp., 925 F.2d 257, 260 (8th Cir. 1991).
With regard to hourly rates, “[a]
reasonable hourly rate is usually the ordinary rate for similar work in the community
where the case has been litigated.” Emery v. Hunt, 272 F.3d 1042, 1048 (8th Cir. 2001).
“[D]istrict courts may rely on their own experience and knowledge of prevailing market
rates.” Hanig v. Lee, 415 F.3d 822, 825 (8th Cir. 2005). A district court has “broad
discretion” in awarding attorneys’ fees. Id.
Here, the Plan submitted an affidavit from counsel laying out the law firm’s
services, hours, fees, and costs. (Morben Aff. ¶¶ 6-9.) The firm’s services are described
generally, and include review of the files, drafting and serving the summons and
complaint, application for entry of default and motion for entry of default judgment, work
with the magistrate judge, discovery efforts, and drafting and arguing the motion for
summary judgment. (Id. ¶ 6.) The firm’s billable hours are not broken out by task, but
they consist of 38 associate hours billed at $185 per hour, 23 partner hours billed at $325
per hour, 2.5 partner hours billed at $385 per hour, and 4.5 paralegal hours billed at $160
per hour. (Id. ¶ 7.) Costs total $799.79. (Id. ¶ 9.) Diamond Lake has not contested these
estimates, but neither are the firm’s services or hours documented in detail. Although the
Court finds that the hourly rates and the number of hours expended are reasonable for this
type of case in the Twin Cities metropolitan area, it will reduce the hours claimed by 25%
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to account for inadequate documentation. The Court further finds that the requested costs
and expenses are reasonable. Based on these submissions, the Court will grant an award
of $12,140.63 in attorneys’ fees and $799.79 in costs.
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
1. Plaintiffs’ motion for Summary Judgment [Docket No. 30] is GRANTED.
2. Defendant shall pay Plaintiffs $588,361 in withdrawal liability, $188,275.52 in
accrued interest, and $58,836.10 in liquidated damages.
3. Defendant shall pay Plaintiffs’ attorneys’ fees in the amount of $12,140.63,
plus costs of $799.79.
LET JUDGMENT BE ENTERED ACCORDINGLY.
DATED: December 29, 2017
at Minneapolis, Minnesota.
__________s/John R. Tunheim_________
JOHN R. TUNHEIM
Chief Judge
United States District Court
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