Iron Workers St. Louis District Council Annuity Trust et al v. United Ironworkers, Inc.
MEMORANDUM AND ORDER...IT IS HEREBY ORDERED that Plaintiffs' motion (Doc. No. 60 ) for attorney's fees, costs, and audit costs is GRANTED in the following amounts: $28,343.34 in attorneys fees, $16,563.10 in audit costs, and 36;1,931.22 in court costs. These amounts shall be added to the Courts prior award of summary judgment in favor of Plaintiffs in the amount of $95,854.99. IT IS FURTHER ORDERED that Defendants motion for attorneys fees is DENIED. (Doc. No. 61 .) All claims against all parties having been resolved, a separate Judgment, showing Defendants full liability of $142,692.65, shall accompany this Memorandum and Order. Signed by District Judge Audrey G. Fleissig on 12/9/2016. (NEB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
IRON WORKERS ST. LOUIS DISTRICT
COUNCIL ANNUITY TRUST, et al.,
UNITED IRONWORKERS, INC.
Case No. 4:15-CV-00713-AGF
MEMORANDUM AND ORDER
This matter is before the Court on cross motions for fees and costs in this action
under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1145, to
recover delinquent fringe benefit contributions. For the reasons set forth below, the
Court will deny Defendant’s motion and will grant Plaintiffs’ motion to the extent that
the Court will award Plaintiffs 40% of their requested attorney’s fees ($28,343.34 of
$70,858.35) and audit costs ($16,563.10 of $41,407.75), and the full amount of their
requested court costs ($1,931.22).
On September 8, 2016, the Court granted in part and denied in part the parties’
cross motions for summary judgment, and ordered that Plaintiffs were entitled to recover
only a portion of the $754,293.26 in delinquent contributions, liquidated damages, and
interest they sought. (Doc. No. 56.) Specifically, the Court held that Defendant was not
responsible for contributions based on bonuses (representing roughly 80% of Plaintiffs’
claim), hours worked by two individuals not employed by Defendant, and hours worked
by ironworkers in Indiana; but that Defendant was responsible for the remaining
contributions sought by Plaintiffs. The Court also granted Plaintiffs’ request for their
audit costs of $41,407.75, upon finding that such costs were assessable against Defendant
under the parties’ contracts,1 that the amount of the costs was supported by the auditor’s
affidavit, and that Defendant had not contested the amount or asserted that the amount
was unreasonable. The Court ordered the parties to confer and submit their agreed or
respective positions as to the amount of delinquent contributions, liquidated damages,
and interest remaining after the deducting the amounts for which the Court found
Defendant was not responsible.
In their responses to the Court’s September 8, 2016 Memorandum and Order, the
parties stated that they agreed that the amount of delinquent contributions, liquidated
damages, and interest owed by Defendant pursuant to the Court’s findings was
The parties’ agreements provide:
If an audit is conducted with the cooperation of the Employer in providing
the requested documentation and responding to any follow up questions; no
significant discrepancies are found; and any amounts determined to be due
are paid without the need for collection efforts then the cost of the audit
will be paid by the Fund. In all other cases, the cost of the audit will be
assessed against the Employer.
(Doc. No. 45-30 at 12.) The Court concluded that because the audit found significant
discrepancies (at least some of which the Court upheld), and because the amounts
determined to be due were the subject of this litigation, the cost of the audit was
assessable against Defendant under the parties’ contract.
$95,854.99. However, in its response, Defendant also argued that the Court should
reconsider its award of audit costs because Plaintiffs did not present to Defendant or the
Court sufficient documentation in support of its request and because Plaintiffs should not
be able to recover for audit costs related to audit findings on which Plaintiffs did not
prevail (such as those relating to bonuses). Defendant also asserted that it was entitled to
attorney’s fees because it prevailed on some aspects of Plaintiffs’ claims.
In their response, Plaintiffs argued that Defendant’s challenge to the audit costs
was untimely and without merit, and that Plaintiffs, not Defendant, were entitled to
Based on the parties’ responses, on September 29, 2016, the Court entered
summary judgment on behalf of Plaintiffs and against Defendant in the amount of
$95,854.99 in delinquent contributions, liquidated damages, and interest. (Doc. No. 59.)
The Court declined to reduce the award of audit costs at that time because Defendant had
not cited any authority for its request to reduce audit costs otherwise assessable under the
parties’ contract, on the basis that Plaintiffs did not recover the entire amount of
contributions sought. However, the Court ordered Plaintiffs to submit a new motion for
audit costs, supported by appropriate documentation, and provided Defendant a renewed
opportunity to contest the reasonableness of those costs. The Court also held that it
would reserve ruling on any request for attorney’s fees until the parties filed
appropriately supported motions.
In their current motion, Plaintiffs provide documentation to support their request
for the $41,407.75 in audit costs, and Plaintiffs also seek $70,858.35 in attorney’s fees
and $1,931.22 in court costs, pursuant to 29 U.S.C. § 1132(g)(2). (Doc. No. 60.)
Defendant has filed an opposing motion seeking $100,347.33 in its own attorney’s fees
and court costs, pursuant to 29 U.S.C. § 1132(g)(1), on the ground that it prevailed to a
large extent on Plaintiffs’ claims. (Doc. No. 61.) Both motions are supported by
affidavits and billing records.
As an initial matter, the Court finds that Defendant is not entitled to attorney’s fees
and costs. The relevant provision of ERISA, 29 U.S.C. § 1132(g), provides:
(1) In any action under this subchapter (other than an action described in
paragraph (2)) by a participant, beneficiary, or fiduciary, the court in
its discretion may allow a reasonable attorney’s fee and costs of action
to either party.
(2) In any action under this subchapter by a fiduciary for or on behalf of a
plan to enforce section 1145 of this title in which a judgment in favor
of the plan is awarded, the court shall award the plan-- . . . (D)
reasonable attorney’s fees and costs of the action, to be paid by the
29 U.S.C. § 1132(g) (emphasis added). This section indicates that the Court “in all
situations save one has discretion to make fee awards to either party, but that fees must be
awarded to the plan if a fiduciary prevails in an action to recover delinquent
contributions.” Carpenters S. California Admin. Corp. v. Russell, 726 F.2d 1410, 1415
(9th Cir. 1984); see also Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252
(2010) (noting that “in ERISA actions under § 1145 . . . , only plaintiffs who ‘obtain a
judgment in favor of the plan’ may seek attorney’s fees”). Because the Court awarded a
judgment in favor of Plaintiffs in their action to enforce § 1145, the Court must award
Plaintiffs their reasonable attorney’s fees and costs under § 1132(g)(2), and the Court
may not make such an award to Defendant under § 1132(g)(1). The Court will therefore
deny Defendant’s motion for attorney’s fees and costs.
With respect to Plaintiffs’ request for attorney’s fees, the Eighth Circuit has held
that the determination of a reasonable attorney’s fee award under § 1132(g)(2) is a matter
within the sound discretion of the trial court. See Greater Kansas City Laborers Pension
Fund v. Thummel, 738 F.2d 926, 931 (8th Cir. 1984). The usual method of calculating
reasonable attorney’s fees is to multiply the hours reasonably expended in the litigation
by a reasonable hourly fee, producing the “lodestar” amount. See, e.g., Local 513, Int’l
Union Operating Eng’rs v. Larry Ortmann Contracting, Inc., No. 4:08-CV-1177 CAS,
2009 WL 151698, at *2 (E.D. Mo. Jan. 22, 2009).
The Eighth Circuit has also cited with approval a 12-factor test for determining the
reasonableness of attorney’s fee awards under ERISA: (1) the time and labor required;
(2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform
the legal service properly; (4) the preclusion of other employment by the attorney due to
acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent;
(7) the time limitations imposed by the client or the circumstances; (8) the amount
involved and the results obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the “undesirability” of the case; (11) the nature and length of the
professional relationship with the client; and (12) the awards in similar cases. Thummel,
738 F.2d at 931 (citing Seymour v. Hull & Moreland Eng'g, 605 F.2d 1105, 1117 (9th
Cir. 1979)). Application of these factors may vary from case to case, id., but “the most
critical factor is the degree of success obtained.” Hensley v. Eckerhart, 461 U.S. 424,
In analyzing federal fee-shifting statutes generally, the United States Supreme
Court has cautioned that, although an attorney should recover a fully compensatory fee
where a plaintiff has obtained excellent results, “[i]f, on the other hand, a plaintiff has
achieved only partial or limited success, the product of hours reasonably expended on the
litigation as a whole times a reasonable hourly rate may be an excessive amount.” Id.
“This will be true even where the plaintiff’s claims were interrelated, nonfrivolous, and
raised in good faith.” Id. “There is no precise rule or formula for making these
determinations,” but “where the plaintiff achieved only limited success, the district court
should award only that amount of fees that is reasonable in relation to the results
obtained,” which may involve “simply reduc[ing] the award to account for the limited
success.” Id. at 440. See also Geissal ex rel. Estate of Geissal v. Moore Med. Corp.,
338 F.3d 926, 936 (8th Cir. 2003) (holding in an ERISA case that “[a] reduced fee award
is appropriate if the relief, however significant, is limited in comparison to the scope of
the litigation as a whole”); but see Anderson v. AB Painting & Sandblasting Inc., 578
F.3d 542, 545 (7th Cir. 2009) (noting in dicta that the practice of reducing ERISA
attorney’s fees awards “where a plaintiff recovers a very small percentage of damages
claimed . . . seems to be losing favor”).
In this case, Defendant does not challenge the reasonableness of Plaintiffs’
attorneys’ hourly rates, but it challenges the amount of the fee award relative to
Plaintiffs’ limited success. In light of the fact that Plaintiffs recovered a little more than
12.5% of the amount sought ($95,854.99 of $754,293.26), and lost on their main legal
argument (regarding bonuses), the Court agrees with Defendant that a reduced attorney’s
fee award is appropriate. Defendant argues that the $70,858.35 in attorney’s fees sought
by Plaintiff should be reduced by 88%. However, upon consideration of all of the factors
listed above, the Court finds that a 60% reduction is sufficient. Cf. Teamsters Health v.
Courier-Post Co., No. 15-844 (JS), 2016 WL 3922634, at *3 (D.N.J. July 18, 2016)
(reducing ERISA attorney’s fee award under § 1132(g)(2) by 60% where the plaintiffs’
recovery was only 23% of what they sought because the plaintiffs did not prevail on a
“personal holidays” issue that was the focus of the litigation); Barnett v. S. California
Edison Co. Long Term Disability Plan, No. 112CV00130LJOSAB, 2016 WL 4077721,
at *24 (E.D. Cal. July 5, 2016) (finding in an ERISA case that “a 60 percent reduction is
an appropriate reduction of the hours requested that accounts for [the plaintiff’s failure to
prevail on the main legal issue in this case”). Therefore, the Court will reduce the
attorney’s fees award to $28,343.34.
The Court will apply the same deduction to Plaintiffs’ request for audit costs.
Defendant does not contest the reasonableness of the auditors’ hourly rates, and the Court
is satisfied that Plaintiffs have provided sufficient documentation to substantiate their
request for costs. But Defendant again argues that the $41,407.75 that Plaintiffs seek in
audit costs should be reduced by 88%, based on Plaintiffs’ limited success. Upon the
Court’s own review of caselaw that the Court finds persuasive and considering the
circumstances of this case—particularly, the Court’s finding that the auditor’s
assumptions as to most of the contributions claimed to be owed were contractually
unwarranted—the Court believes that reconsideration of the audit cost award is
appropriate. The Court will therefore reduce the audit costs sought by Plaintiffs by 60%,
to $16,563.10. See Morin v. Nu-Way Plastering Inc., No. CV 03-405 (LDW)(ARL),
2005 WL 3470371, at *4 (E.D.N.Y. Dec. 19, 2005) (“Reasonableness [of an audit costs
award] may be determined by applying the same standards that generally apply to
attorneys’ fees awards.”); Trs. of Bricklayers & Allied Craftworkers Local 5 N.Y.
Retirement v. Helmer-Cronin Const., Inc., No. 03 CIV. 0748 (MDF), 2005 WL 3789085,
at *8 (S.D.N.Y. Oct. 24, 2005) (finding with respect to contractually-authorized audit
costs in an ERISA claim, that a reduction of 50% was warranted where there was a
“significant discrepancy” between the amount of unpaid contributions first calculated by
the auditor and the amount found to be actually owed, and where “the Trustees
apparently erroneously advised [the auditor] to conduct the audit under the assumption
that the subcontracts were for labor only”).
The Court finds that Plaintiffs are entitled to the full amount of court costs sought
($1,931.22), as taxable costs under 28 U.S.C. § 1920. See Emmenegger v. Bull Moose
Tube Co., 33 F. Supp. 2d 1127, 1132 (E.D. Mo. 1998) (finding that the term “costs” in 29
U.S.C. § 1132(g) refers to the same items of “costs” listed in 28 U.S.C. § 1920).
Defendant has not asserted that any of the court costs itemized in Plaintiffs’ motion
(filing and service fees, fee for copies, and fees for deposition transcripts) are
objectionable, and the Court finds that these costs are recoverable under § 1920. See 29
U.S.C. §§ 1920(1), (2), (4).
IT IS HEREBY ORDERED that Plaintiffs’ motion (Doc. No. 60) for attorney’s
fees, costs, and audit costs is GRANTED in the following amounts: $28,343.34 in
attorney’s fees, $16,563.10 in audit costs, and $1,931.22 in court costs. These amounts
shall be added to the Court’s prior award of summary judgment in favor of Plaintiffs in
the amount of $95,854.99.
IT IS FURTHER ORDERED that Defendant’s motion for attorney’s fees is
DENIED. (Doc. No. 61.)
All claims against all parties having been resolved, a separate Judgment,
showing Defendant’s full liability of $142,692.65, shall accompany this Memorandum
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 9th day of December, 2016
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