Montefiore Medical Center v. Teamsters Local, 272 et al
Filing
153
OPINION AND ORDER re: (142 in 1:09-cv-03096-RA-SN) MOTION for Attorney Fees . filed by Montefiore Medical Center, (105 in 1:14-cv-10229-RA-SN) MOTION for Attorney Fees . filed by Montefiore Medical Center. Montefiore' s motion for attorneys' fees and costs is GRANTED in part and DENIED in part. Specifically, the Court(1) approves the hourly rates proposed by Montefiore; (2) applies a 75% reduction for fees and costs incurred up to and including the trial in the First Action, but otherwise adopts Montefiore's reductions as proposed; (3) excludes 11.2 hours billed by three of GW's paralegals; (4) imposes an additional 20% reduction on the total number of hours expended; and (5) removes $13.09 in costs. Within seven days of the date of this Opinion & Order, Montefiore is directed to submit a proposed judgment consistent with this ruling for the Court's consideration. The Clerk of the Court is respectfully directed to terminate the motions at Docket Nos. 142 (09-CV-3096) and 105 (14-CV-10229). SO ORDERED. (Signed by Judge Ronnie Abrams on 9/19/2019) (kv) Transmission to Finance Unit (Cashiers) for processing.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
USDC-SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
DATE FILED:
1q ("I
1/ I
MONTEFIORE MEDICAL CENTER,
Plaintiff,
No. 09-CV-3096 (RA)(SN)
v.
LOCAL 272 WELFARE FUND, et al.,
Defendants.
MONTEFIORE MEDICAL CENTER,
Plaintiff,
No. 14-CV-10229 (RA)(SN)
V.
OPINION & ORDER
LOCAL 272 WELFARE FUND, et al.,
Defendants.
RONNIE ABRAMS, United States District Judge:
Plaintiff Montefiore Medical Center ("Montefiore") filed two actions, in 2009 (the "First
Action") and in 2014 (the "Second Action"), against Defendants Local 272 Welfare Fund (the
"Fund") and its manager, Marc Goodman. 1 In both cases, Montefiore sought payment for
medical services that it provided to the Fund's participants. The Court has resolved the parties'
disputes through numerous decisions issued over the past decade.
Montefiore now seeks an award of attorneys' fees for claims that it litigated in the First
and Second Actions that were governed by the Employee Retirement Income Securities Act of
1
Montefiore subsequently filed a third action against the Fund (the "Third Action"), see No. 17-CV10213 (RA) (SN) (S.D.N.Y.), which is not at issue here.
1974 ("ERISA"). For the following reasons, Montefiore's motion is GRANTED in part and
DENIED in part.
BACKGROUND
I.
Factual History
The Fund, a self-insured employee benefit plan, provides medical coverage to its
participants. Between 2003 and 2006, the Fund contracted with a preferred provider_
organization, Horizon Healthcare Services of New York, Inc. ("Horizon"). Horizon provided the
Fund access to its participating medical providers, which included Montefiore, a nonprofit
hospital in the Bronx, New York.
The Fund's relationship with Horizon ended in 2007. As a result, the Fund contracted
with MagnaCare Administrative Services ("MagnaCare"), whose provider network also included
Montefiore. A year later, in August 2008, Montefiore terminated the Fund's right to obtain
medical services under the MagnaCare contract. After that date, Montefiore was an out-ofnetwork provider to the Fund's participants.
Throughout this period, Montefiore argued that the Fund improperly denied Montefiore's
claims for reimbursement. Specifically, Montefiore raised four types of claims: (1) breach of
contract claims that arose during the Horizon contract; (2) breach of contract claims that arose
during the MagnaCare contract; (3) ERIS A claims that arose during the MagnaCare contract; and
(4) unjust enrichment claims, or in the alternative, ERIS A claims, that arose after the MagnaCare
contract was terminated. The First Action concerned all four types of claims; the Second Action
concerned only post-MagnaCare ERISA claims.
2
II.
Procedural History
A.
The First Action
Montefiore commenced the First Action on March 11, 2009, in the Supreme Court of the
State of New York, Bronx County. Dkt. No. 1.2 The Fund subsequently removed the case to
this Court, asserting that Montefiore's claims were preempted under ERISA. See id On
November 12, 2009, Judge Harold Baer, Jr. denied Montefiore's motion to remand. Dkt. No. 16.
That decision was affirmed by the Second Circuit in April 2011. See Montefiore Med. Ctr. v.
Teamsters Local 272,642 F.3d 321 (2d Cir. 2011).
Judge Baer conducted a two-day bench trial in September 2012. Dkt. No. 36-38. After
trial, on December 14, the Fund submitted a letter to the Court stating that the Fund had "paid all
claims ... for services rendered after August 13, 2008, when the Fund was terminated from the
MagnaCare network." Dkt. No. 48-2 at 2. The Fund submitted a similar letter on February 7,
2013. Dkt. No. 48-4 at 2. This time, the Fund asserted that it had paid "all claims for services
rendered during the period prior to August 13, 2008 ... except for those claims that were denied
for lack of pre-certification." Id. Montefiore opposed the Fund's December 14 letter, but it did
not respond to the letter submitted in February. See Dkt. No. 48-3 at 4.
On June 25, 2013, Judge Baer issued an Opinion and Order dispensing with Montefiore's
claims. See Dkt. No. 45. Based on the Fund's letters, Judge Baer determined that most of the
MagnaCare claims, and all of the post-MagnaCare claims, had been settled. See id. at 5-7.
Those claims were dismissed, and the remaining two MagnaCare claims, which were analyzed
2
Unless stated otherwise, docket citations refer to the First Action, No. 09-CV-03096 (RA) (SN)
(S.D.N.Y.).
3
under ERISA, were denied on the merits. See id. at 9. Montefiore appealed, and on January 21,
2015, the Second Circuit vacated the judgment in its entirety. See Montefiore Med. Ctr v.
Teamsters Local 272,589 F. App'x 32 (2d Cir. Jan. 21, 2015). The Second Circuit held that the
"District Court's decision to credit one party's assertion that certain claims had been 'settled'
was clearly erroneous." Id. at 34.
On remand, Magistrate Judge Sarah Netburn issued a Report and Recommendation
addressing the majority ofMontefiore's claims. Dkt. No. 106. Specifically, Judge Netburn
recommended that Montefiore be awarded: (1) $42,698.03 for its breach of contract claims under
the Horizon contract; and (2) $641,326 for its breach of contract and BRISA claims under the
MagnaCare contract. Id. at 25. Because a related decision from the Second Action was pending
before the Court of Appeals, the post-MagnaCare claims - which Montefiore had since decided
were governed only by ERISA- were held in abeyance. Id. at 6; Dkt. No. 83 at 3. On April 3,
2018, this Court adopted Judge Netburn's decision in its entirety. Dkt. No. 111.
B.
The Second Action
Montefiore commenced the Second Action on December 31, 2014. No. 14-CV-10229,
Dkt. No. I. The complaint included only post-MagnaCare ERISA claims; that is, ERISA claims
that arose after the MagnaCare contract was terminated. Id.
The parties cross-moved for summary judgment in the summer of 2016. Interpreting the
Fund's Summary Plan Description ("SPD"), Judge Netburn found that, in deciding how much to
pay an out-of-network provider, the Fund was required to "determine what it pays its various innetwork providers for a particular service" and then select the "maximum, or highest, amount."
No. 14-CV-l 0229, Dkt. No. 68 at 13 (internal quotation marks omitted). As a result, Judge
Netburn recommended granting Montefiore's motion for summary judgment. Id. at 19-20. The
4
Court adopted this recommendation in its entirety on March 31, 2017, which was affirmed by the
Second Circuit on February 28, 2018. No. 14-CV-10229, Dkt. No. 73; Montefiore Med. Ctr. v.
Local 272 Welfare Fund, 712 F. App'x 104 (2d Cir. Feb. 28, 2018).
C.
Consolidated Proceedings
On May 3, 2018, Judge Netburn directed the parties to file consolidated briefing for all
outstanding issues in the First and Second Actions. Dkt. No. 116. Following the appeal in the
Second Action, the Fund agreed to pay the majority of the post-MagnaCare BRISA claims from
the First Action, which had previously been held in abeyance and were governed by the same
analysis. See Dkt. No. 127 at 7 & n.3; Dkt. No. 88 at 3-4. Thus, only four issues remained:
First, whether Montefiore is entitled to reimbursement on six postMagnaCare BRISA claims: five from the First Action, and one from
the Second Action. Second, whether Montefiore is entitled to
prejudgment interest on its post-MagnaCare BRISA claims from
both the First and the Second Actions. Third, whether Montefiore is
entitled to reasonable attorney's fees. And fourth, whether
Montefiore properly calculated its prejudgment interest on its breach
of contract claims in the First Action.
Dkt. No. 140 at 5.
On January 25, 2019, Judge Netburn issued a Report and Recommendation addressing
these issues. See Dkt. No. 140. Judge Netburn concluded that three claims from the First Action
should be denied because Montefiore did not obtain precertification. Id. at 8. However, because
emergency room services do not need to be precertified, Judge Netbum determined that
Montefiore should be partially reimbursed for the remaining two claims from the First Action,
and the only remaining claim from the Second Action. Id. at 11, 14. Finally, Judge Netburn
recommended that Montefiore should be awarded prejudgment interest on its BRISA claims at
the federal prime rate. Id. at 19. Because Montefiore had withdrawn its request for attorneys'
fees, see Dkt. No. 135 at 4, that issue was not addressed in Judge Netbum's decision.
5
This Court adopted Judge Netburn's Report and Recommendation in its entirety on
February 12, 2019. Dkt. No. 141. In doing so, the Court stated that the "cases shall remain open
so that Montefiore may renew its application for attorneys' fees incurred in litigating its ERISA
claims in these actions." Id. at 3. Montefiore filed its motion for attorneys' fees on February 26,
2019 ("Pl.' s Br."), the Fund filed its opposition on April 17, 2019 (Def.' s Br."), and Montefiore
filed a reply on May 1, 2019 ("Pl.'s Reply Br.").
The Court now concludes that: (1) Montefiore is entitled to an award of reasonable
attorneys' fees and costs for its ERISA claims in the First and Second Actions; and (2) a minor
reduction in Montefiore's requested fee is appropriate.
DISCUSSION
I.
Attorneys' Fees under ERISA
A.
Success on the Merits
Under ERISA, a court "may allow a reasonable attorney's fee and costs of action to either
party." 29 U.S.C. ยง 1132(g)(l). This provision must be "liberally construed to protect the
statutory purpose of vindicating retirement rights." Locher v. Unum Life Ins. Co. ofAm., 389
F.3d 288,298 (2d Cir. 2004) (citations omitted).
To obtain such fees, a party must achieve "some degree of success on the merits." Hardt
v. Reliance Standard Life Ins. Co., 560 U.S. 242,255 (2010). A claimant does not satisfy this
requirement by achieving "trivial success on the merits" or a "purely procedural victory." Id.
Rather, the court must be able to "fairly call the outcome of the litigation some success on the
merits without conducting a 'lengthy inquiry into the question whether a particular party's
success was substantial or occurred on a central issue.'' Id. (quoting Ruckelshaus v. Sierra Club,
463 U.S. 680,688 n.9 (1983)).
6
Here, as the Fund does not dispute, Montefiore succeeded on its ERISA claims. The
Court granted Montefiore summary judgment in the Second Action, finding that the SPD
unambiguously required the Fund to reimburse Montefiore the maximum amount that it would
pay an in-network provider for the same service. No. 14-CV-10229, Dkt. No. 68 at 13. This
decision was then affirmed by the Second Circuit. See Montefiore Medical Center, 712 F. App'x
at 106. Although the Court remanded the case to the Fund, it did so only because the parties did
not provide a list of in-network rates for the services provided. See No. 14-CV-10229, Dkt. No.
68 at 19. The Fund subsequently paid all except one claim at the maximum in-network rate, and
even the remaining claim was partially reimbursed for emergency room charges. Dkt. No. 127 at
7; Dkt. No. 140 at 14. This certainly qualifies as "some success on the merits." Scarangella v.
Grp Health, Inc., 731 F.3d 146, 155 (2d Cir. 2013)("[Hardt] clearly held that a remand order
opining positively on the merits of the plaintiffs claim was sufficient [to award attorneys'
fees].").
A similar analysis applies to the First Action. There, Montefiore ultimately asserted that
ERISA governed 31 of its reimbursement claims: 2 MagnaCare claims, and all 29 postMagnaCare claims. 3 Dkt. No. 41 at 23, 25; Dkt. No. 83 at 2-3. Although Montefiore did not
prevail on the former, it achieved great success on the latter.
The Court's summary judgment decision in the Second Action established the
reimbursement rate for post-MagnaCare ERISA claims. After this decision was affirmed by the
Second Circuit, the Fund agreed to pay all except five of the relevant claims from the First
In her February 2018 Report and Reconunendation, Judge Netburn concluded that an additional four
MagnaCare claims were governed by BRISA. Dkt. No. 106, at 12-13. However, Montefiore argued that
these claims were governed by state law, and it does not seek to recover any fees incurred in filing its
motion here. Pl. 's Br. at 20.
3
7
Action at the maximum in-network rate. Dkt. No. 127 at 7 & n.3. Three of the remaining claims
were denied, but two were partially reimbursed for emergency room charges. Dkt. No. 140 at 8,
11. Thus, as a result of its successful litigation in the Second Action, Montefiore obtained a
substantial portion of its requested relief under ERISA in the First Action. This is sufficient to
obtain an award of attorneys' fees. See Scarangella,731 F.3d at 155 (recognizing that "judicial
action [that] in some way spur[s] one party to provide another party with relief ... [can]
amount[] to success on the merits").
Accordingly, the Court concludes that Montefiore is entitled to reasonable fees and costs
for its ERISA claims in the First and Second Actions.
B.
The Chambless Factors
"Success on the merits" is the sole factor that a court must consider in awarding
attorneys' fees under ERISA. Donachie v. Liberty Life Assurance Co., 745 F.3d 41, 46 (2d Cir.
2014). Nevertheless, courts may apply five additional factors in exercising their discretion. Id.
These factors, known in this Circuit as the Chambless factors, are:
(I) the degree of opposing parties' culpability or bad faith; (2) ability
of opposing parties to satisfy an award of attorneys' fees; (3)
whether an award of attorneys' fees against the opposing parties
would deter other persons acting under similar circumstances; (4)
whether the parties requesting attorneys' fees sought to benefit all
participants and beneficiaries of an ERISA plan or to resolve a
significant legal question regarding ERISA itself; and (5) the
relative merits of the parties positions.
Id. (quoting Hardt, 560 U.S. at 249 n.1).
The Fund does not mention the Chambless factors in its memorandum of law. However,
as part of the Declaration of Marc Goodman, the Fund implicitly contends that it may have some
difficulty in satisfying an award of attorneys' fees. See Dkt. No. 149110 (stating that "the
Fund's financial ability to pay an award of attorneys' fees should be evaluated not simply against
8
its current assets, but in consideration of its low reserves, its future obligations to pay incurred
claims, and the risks that it as a self-insured Fund has of non-collection of contributions and
large claims."). A brief examination of the Chambless factors is therefore appropriate.
First, the Fund violated the plain language of the SPD when it failed to reimburse
Montefiore with the maximum in-network rate. Such conduct demonstrates culpability for
purposes of the first factor. See Div. 1181, Amalgamated Transit Union v. N Y.C. Dep 't of
Educ., No. 13-CV-9112 (PKC), 2018 WL 4757938, at *3 (S.D.N.Y. Oct. 2, 2018) ("Culpability
does not require malice, and instead considers conduct that is 'blameable' or 'at fault,' such as
the denial of a meritorious benefits application."); Alfano v. CIGNA Life Ins. Co. ofNew York,
No. 07-CV-9661 (GEL), 2009 WL 890626, at *1 (S.D.N.Y. Apr. 2, 2009) ("[A] defendant is
culpable where it has violated ERISA, thereby depriving plaintiff of his rights under a pension
plan and violating a Congressional mandate.") (internal quotation marks omitted). Moreover, in
both the First and Second Actions, the Fund disregarded Department of Labor regulations when
issuing benefit determinations. Dkt. No. 45 at 8; Dkt. No. 140 at 6-7, 13; 14-CV-10229, Dkt.
No. 68 at 9-10. This further underscores the Fund's culpability.
Second, a fee award is appropriate as a matter of deterrence. Awarding attorneys' fees in
this case will discourage ERISA plans from ignoring their reimbursement obligations in the
future. Third, Montefiore's litigation efforts benefited the Fund's participants as a whole. By
forcing the Fund to follow the plain language of the SPD, Montefiore saved the Fund's members
thousands of dollars in out-of-network medical expenses. Finally, the relative merits of the
parties' positions favor Montefiore. In the First Action, the Second Circuit concluded that the
Fund "provide[d] no authority for its novel argument that one side can moot claims ... by
paying an amount of its own choosing." Montefiore Medical Center, 589 F. App'x at 34.
9
Similarly, in the Second Action, the Second Circuit concluded that the SPD unambiguously
supported Montefiore's interpretation of the Fund's payment responsibilities. See Montefiore
Medical Center, 712 F. App'x at 106.
The Fund provides no meaningful argument regarding the Chambless factors. Even
assuming the Fund is in a fragile financial state -
a proposition opposed by Montefiore and
previously rejected by this Court, see Montefiore Med. Ctr. v. Local 272 Welfare Fund, 2019 WL
57145, at *7, adopted by, 2019 WL 569805 (S.D.N.Y. Feb. 12, 2019) -the Court concludes
that the other factors suggest an award of attorneys' fees is appropriate.
II.
Montefiore's Application for Fees and Costs
The lodestar - the product of a reasonable hourly rate and the reasonable number of
hours required- produces a presumptively reasonable fee. Millea v. Metro-North Railroad Co.,
658 F.3d 154, 166 (2d Cir. 2011). A "reasonable hourly rate is the rate a paying client would be
willing to pay." Arbor Hill Concerned Citizens Neighborhood Assoc. v. Cnty. ofAlbany, 522
F.3d 182, 190 (2d Cir. 2008). To determine this amount, courts rely on the "hourly rates
prevailing in the district for similar services provided by attorneys with comparable skill and
experience." Abdel! v. City ofNew York, No. 05-CV-8453 (RJS), 2015 WL 898974, at *2
(S.D.N.Y. Mar. 2, 2015) (internal quotation marks omitted). Courts must also consider the
factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974),4
4
The Johnson factors include: (I) the time and labor required; (2) the novelty and difficulty of the
questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6)
whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances;
(8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of
the attorneys; (I 0) the "undesirability" of the case; ( 11) the nature and length of the professional
relationship with the client; and (12) awards in similar cases. Arbor Hill, 522 F.3d at 186 n.3.
10
although separate findings as to each factor are unnecessary, see CB. v. New York City Dep 't of
Educ., No. 18-CV-7337 (CM), 2019 WL 3162177, at *5 (S.D.N.Y. July 2, 2019) (citations
omitted).
To determine the reasonable number of hours required to litigate the case, courts must
review the attorneys' contemporaneous time records. Gonzalez v. Scalinatella, Inc., 112 F.
Supp. 3d 5, 29 (S.D.N.Y. 2015). Any hours that were not "reasonably expended" should be
excluded. Canada Dry Delaware Valley Bottling Co. v. Hornell Brewing Co., No. 11-CV-4308
(PGG), 2013 WL 6171660, at *4 (S.D.N.Y. Nov. 25, 2013) (internal quotation marks omitted).
This analysis considers "overstaffing, the skill and experience of the attorneys, [and any]
redundant, excessive, or unnecessary hours." Gonzalez, 112 F. Supp. 3d at 29 (citing Clarke v.
Frank, 960 F.2d 1146, 1153 (2d Cir. 1992)).
Multiplying the reasonable number of hours by the appropriate hourly rate produces the
lodestar. Millea, 658 F.3d at 166. Although this amount is not conclusive, the court should
apply an adjustment only in rare circumstances. We Shall Overcome Found v. Richmond Org.,
Inc., 330 F. Supp. 3d 960,974 (S.D.N.Y. 2018) (citing Millea, 658 F.3d at 167).
A.
Hourly Rate
Montefiore is represented by Garfunkel Wild ("GW"), a medium-sized law firm that
specializes in healthcare law. Dkt. No. 143, Declaration of John G. Martin ("Martin Deel.") ,r
12. Montefiore seeks to recover fees for three partners, four associates, and several paralegals.
The Court concludes that Montefiore's proposed hourly rates are reasonable.
John Martin, the lead partner in the First and Second Actions, has approximately 34 years
oflitigation experience. Martin Deel.
,r 10.
Martin worked for 23 years as a prosecutor in the
Office of the New York County District Attorney and the Office of the United States Attorney
II
for the Eastern District of New York. Id. ,i,i 10-11. Since then, Martin has worked as a civil
litigator for more than a decade as a partner at GW. Id. ,i 12. He has litigated numerous
healthcare-related cases, including reimbursement disputes, and recently published an article on
healthcare litigation in the New York Law Journal. Id. Martin charged Montefiore a discounted
hourly rate between $383 and $505. Id., Exhibits C & D.
Two other GW partners performed limited work during these cases. Michael Keane has
approximately 31 years of experience and is the Co-Chair of the Litigation and Arbitration
Group. Martin Deel. ,i 14. Keane has substantial experience litigating hospital payment issues
and payor-provider disputes. See id. Debra Silverman, who has been practicing law for
approximately 33 years, works on managed care issues and regulatory matters. Id ,i 15. She is
also a frequent lecturer for the Healthcare Financial Management Association. See id. Keane's
discounted hourly rate ranged from $425 to $518, and Silverman's ranged from $374 to $484.
Id, Exhibits C & D.
Montefiore also seeks attorneys' fees on behalf of four associates. Marc Sittenreich has
approximately seven years of litigation experience. Martin Deel. ,i 16. This includes two years
with the Health Care Division of the Federal Trade Commission, and four years at GW, where he
has litigated payor-provider disputes and other claims under ERISA. Id. Sittenreich's discounted
billing rate ranged from $246 to $293 per hour. Id., Exhibits C & D.
Alicia Wilson, another associate, worked on the First Action in 2012 and 2013. Martin
Deel. ,i 17. At that time, she had approximately seven years of experience practicing healthcarerelated litigation. Id. Courtney Rogers, who worked on the First Action in 2013, had
approximately eight years ofrelevant experience. Id. ,i 18. Wilson's discounted hourly rate
ranged between $255 and $300, and Rogers's ranged from $259 to $315. Id., Exhibits C & D.
12
Lastly, Dayna Tann, a:junior associate, worked on the First Action in 2011 and 2012.
Martin Deel. ,i 19. At that time, she had approximately one-to-two years of experience
practicing health care-related litigation. Id. Her discounted billing rate was between $170 and
$178 per hour. Id., Exhibits C & D.
Montefiore argues that GW's discounted rates should be used to calculate the lodestar.
The Court agrees. The actual billing arrangement provides a "strong indication of what private
parties believe is the reasonable fee to be awarded." Crescent Pub! 'g Grp., Inc. v. Playboy
Enter., 246 F.3d 142, 151 (2d Cir. 2001) (internal quotation marks omitted). Here, Montefiore
has paid GW's bills in full, except for those submitted in connection with this fee application.
Pl.'s Br. at 18. This suggests that Montefiore's requested hourly rates are reasonable. See
Triumph Constr. Corp. v. New York City Council of Carpenters Pension Fund, No. 12-CV-8297
(KPF), 2014 WL 6879851, at *4 (S.D.N.Y. Dec. 8, 2014) ("That the fees requested equal the
amount actually billed to Respondents is a strong indicator that those fees are reasonable.").
Furthermore, the discounted rates are typical of those charged by attorneys with
commensurate skill and experience in this District. Martin, Keane, and Silverman, the three
partners who worked on the First and Second Actions, each have over thirty years of experience.
Their discounted billing rates - which never exceeded $525 per hour and were often quite lower
-
are consistent with awards in similar cases. See, e.g., Dimopoulou v. First Unum Life Ins.
Co., No. 13-CV-7159 (ALC), 2017 WL 464430, at *3 (S.D.N.Y. Feb. 3, 2017) (awarding $660
per hour to a partner with 25 years of ERJSA experience); Doe v. Unum Life Ins. Co. ofAm., No.
12-CV-9327 (LAK) (AJP), 2016 WL 335867, at *5 (S.D.N.Y. Jan. 28, 2016), adopted by, 2016
WL 749886 (Feb. 23, 2016) (awarding $600 per hour to a partner with 33 years of experience, 20
of which focused on ERJSA); Wallace v. Grp. Long Term Disability Plan/or Employees of
13
TDAmeritrade Holding Corp., No. 13-CV-6759 (LGS), 2015 WL 4750763, at *6 (S.D.N.Y.
Aug. 11, 2015) (awarding $450 per hour to a partner with 34 years of experience).
The same holds true for GW's associates. Sittenreich, Wilson, and Rogers had between
six and eight years of experience during the relevant period, and Tann, a junior associate, had
between one-to-two years. These attorneys all had substantial familiarity with healthcare-related
litigation. When determining a party's lodestar, courts in this District frequently award "$300
per hour for senior associates with at least eight years of experience," and "in the range of $125215 to associates with three years of experience or less." Thor 725 8th Avenue LLC v.
Goonetilleke, No. 14-CV-4968 (PAE), 2015 WL 8784211, at *11 (S.D.N.Y. Dec. 15, 2015)
(citations omitted); accord Dimopoulou, 2017 WL 464430, at *3 ("[T]he range of awarded rates
for associates with approximately five years of experience has been between $250 and $350.").
GW billed its mid-level associates between $246 and $315 per hour, and its junior associate
between $170 and $178 per hour. Montefiore's requested rates are therefore reasonable when
compared with awards with similarly-experienced attorneys.
Finally, Montefiore seeks hourly rates between $166 and $204 for GW's paralegals.
Although on the higher side of what is typically awarded, the Court does not believe a reduction
is necessary here. Montefiore has already paid these charges in full, and a $200 hourly rate for
paralegals is not uncommon in this District. See Sprint Commc 'ns Co. v. Chong, No. l 3-CV3846 (RA) (SN), 2014 WL 6611484, at *8 (S.D.N.Y. July 14, 2014), adopted by, (Nov. 21,
2014) (collecting cases); accord Therapy Prods., Inc. v. Bissoon, No. 07-CV-8696 (DLC), 2010
WL 2404317, at *5 (S.D.N.Y. Mar. 31, 2010), adopted by, 2010 WL 2541235 (June 15, 2015);
Dimopoulou, 2017 WL 464430, at *3 (approving hourly rates between $125 and $190 per hour
for paralegals in an ERlSA case).
14
The Fund's argument that Montefiore's proposed hourly rates are excessive is unavailing.
The cases cited by the Fund involve petitions to confirm an arbitration award, or default
judgments where the defendant never appeared. See, e.g., Tr. of the New York City Dist. Council
of Carpenters Pension Fund v. Onyx Glass & Metal Corp., No. 14-CV-7333 (PAE), 2015 WL
5144120, at *2-3 (S.D.N.Y. Sept I, 2015). Although one case proceeded to summary judgment,
the defendant conceded liability, and the plaintiff was unsuccessful in litigating damages. See
Verdier v. Thalle Constr. Co., No. 14-CV-4436 (NSR) (LMS), 2017 WL 8029054, at *I
(S.D.N.Y. Aug. 3, 2017). In this case, however, Montefiore has engaged in nearly a decade of
litigation, including a bench trial, multiple dispositive motions, and two appeals. Moreover, as
discussed above, Montefiore largely succeeded on its ERISA claims, obtaining significant
money damages as a result.
Given the amount recovered and the contested nature of the litigation- as well as the
fact that the requested rates were actually paid and are typical of those charged by attorneys with
similar skill and experience -
the Court concludes that the discounted rates are reasonable and
should not be reduced.
B.
Contemporaneous Time Records
Absent unusual circumstances, attorneys are required to submit contemporaneous time
records with their fee applications. See Scott v. City ofNew York, 626 F.3d 130, 133 (2d Cir.
2010). The records should specify, for each attorney, the date, the hours expended, and the
nature of the work performed. Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) (quoting New
York Ass 'nfor Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983)).
Here, Montefiore submitted legal bills that it received from GW on a monthly basis.
Martin Deel., Exhibits C & D. The bills include the dates, the number of hours, and the work
15
performed by each GW attorney and paralegal. Id. Although the bills themselves were created
after-the-fact, they were generated entirely from electronic time entries logged daily on Carpe
Diem, a legal tracking software. Dkt. No. 150, Reply Affidavit of John G. Martin ("Martin
Reply Aff.") ~ 10. Under GW policy, attorneys are required to record the number of hours they
spend on a client matter, along with a description of the work performed, on a daily basis. Id.
The Fund contends that Montefiore' s legal bills are insufficient to justify an award of
attorneys' fees because these bills were reconstructed. See Def.' s Br. at 8-9. The Court
disagrees.
First, reconstructed documents can be used to support a fee application so long as the
attorney "made contemporaneous entries as the work was completed," and the documents are
"based on th[ose] contemporaneous records." See Marion S. Mishkin Law Office v. Lopalo, 767
F.3d 144, 149 (2d Cir. 2014) (quoting Cruz v. Local Union No. 3, Int'/ Ed. ofElec. Workers, 34
F.3d 1148, 1160 (2d Cir. 1994)). That is exactly what happened here. Pursuant to firm policy,
GW made daily entries describing the work performed in the First and Second Actions. The
legal bills submitted to the Court were populated entirely from these entries. Accordingly,
Montefiore has satisfied the requirements under Carey and its progeny.
Second, the cases cited by the Fund in support of its position are inapposite. In RLS
Associates, for example, the attorney "fail[ed] entirely" to show that his billing records were
"based upon" or "a reconstruction of contemporaneous time records." RLS Assocs., LLC v.
United Bank ofKuwait PLC, No. 01-CV-1290 (CSH), 2002 WL 1285359, at *2 (S.D.N.Y. June
10, 2002). Here, Montefiore provided a sworn declaration explaining how GW attorneys record
their time, and how that information is used to populate GW's legal bills. This is sufficient to
obtain an award of attorneys' fees. See Tr. ofEmpire State Carpenters Annuity, Apprenticeship,
16
Labor-Mgmt. Coop. v. Dipizio Constr., No. 15-CV-2592, 2016 WL 3033722, at *6 (E.D.N.Y.
May 25, 2016) (relying on an attorney's declaration to conclude that billing information was
entered contemporaneously); RLS Associates, 2002 WL 1285359, at *2 (requiring attorney to
submit an "affidavit describing the firm's record-keeping and billing procedures").
C.
Hours Expended
1.
Montefiore's Self-Imposed Reductions
Montefiore acknowledges that certain fees and costs from the First and Second Actions
are not compensable. In April 2011, the Second Circuit held that several ofMontefiore's claims
were preempted by ERISA. Montejiore Med. Ctr., 642 F.3d at 332. Because Montefiore had
argued that its claims were governed by state law, it does not seek any fees for work performed
before the Second Circuit's decision. Martin Deel. 1 23.
After amending its complaint, Montefiore contends that the First Action consisted of an
approximately equal number ofERISA claims and contract claims. Martin Deel. 124. As such,
Montefiore seeks to recover 50% of the fees spent litigating the First Action up to and including
the bench trial before Judge Baer. 5 Id. Montefiore makes a similar concession regarding its
August 2017 motion for judgment. Id. 130. Because the post-MagnaCare ERISA claims were
held in abeyance, Montefiore does not seek any fees in connection with its motion. Id.
The Second Action, in contrast, consisted exclusively of post-MagnaCare ERISA claims.
Because the entire litigation was governed by ERIS A, Montefiore seeks 100% of the fees that it
Following the trial, Montefiore appealed Judge Baer's decision that most of the MagnaCare claims, and
all of the post-MagnaCare claims, had been settled. Dkt. No. 45, at 5-7. Because the appellate arguments
were identical for both the contract claims and the ERISA claims, Montefiore seeks I 00% of its fees in
connection with the appeal. Martin Deel. , 26.
5
17
incurred in litigating the case through sununary judgment and appeal. Martin Deel.
,r 28.
The
only exception concerns the Fund's partial motion to dismiss. Because that motion was decided
in the Fund's favor, Montefiore does not seek any of its corresponding fees or expenses. Id
,r 29
n.4.
In May 2018, Judge Netbum directed the parties to file consolidated briefing for all
outstanding issues in the First and Second Actions. Dkt. No. 116. Montefiore moved for
judgment on six post-MagnaCare ERISA claims. Nevertheless, it included other non-ERISA
issues in its briefing, and the Court denied portions of its requested relief under ERIS A.
Montefiore therefore seeks to recover only 50% of its fees litigating the motion. Martin Deel.
,r
31.
Finally, Montefiore seeks 100% of the fees incurred while preparing this motion. Martin
Reply Aff.
,r,r 21-23.
The legal bills documenting the relevant fees are contained in Exhibits A
and B of the Martin Reply Affidavit. Id. In addition, Montefiore also requests compensation for
10.2 hours logged on the day it submitted its reply. Id
,r 24.
Although Montefiore does not
include a legal bill documenting these hours, Martin describes the work performed and the
relevant hourly rate in sufficient detail in his declaration. Id
,r,r 25-26.
Accordingly, these
hours should be included in Montefiore's fee award. See Lopalo, 767 F.3d at 149 (quoting
Davidv. Sullivan, 777 F. Supp. 212,223 (E.D.N.Y. 1991)).
Montefiore's proposed reductions are sufficient to ensure that it is compensated only for
time spent litigating ERISA claims. Thus, with one exception, the Court will apply the
reductions when calculating Montefiore's fee request. The exception concerns the fees incurred
up to and including the trial in the First Action. For this period, the Court finds that a greater
reduction is warranted.
18
At the time of trial, Montefiore argued that: (a) 10 claims were governed by the Horizon
contract; (b) 18 claims were governed by the MagnaCare contract; (c) 2 claims, despite arising
during the MagnaCare contract, were governed by ERISA; and (d) 29 post-MagnaCare claims
were governed by state law, and in the alternative, by ERISA. Dkt. No. 41 at 15, 22-23, 26, 28.
Although Montefiore eventually decided to bring its post-MagnaCare claims only under ERISA,
it did not make this decision until well after trial. See Dkt. No. 83 at 3. As a result, Montefiore
incurred fees litigating the post-termination claims under state law, which cannot be recovered in
a fee motion under ERISA. See, e.g., Dkt. No. 40 at 7-10 (arguing that the Fund was unjustly
enriched by failing to pay for post-MagnaCare admissions).
The Court concludes that a 75% reduction is more appropriate for fees incurred up to and
including the trial in the First Action. The Court will apply Montefiore's other reductions as
proposed.
2.
Other Unreasonable or Unnecessary Hours
The Fund contends that Montefiore's billing records are "awash with vague, block-billed,
and erroneous entries that warrant no reimbursement." Def. 's Br. at 11. The Court agrees, but
only to a limited extent. Accordingly, the Court will apply a small percentage reduction to
Montefiore's fee request.
i.
Vague Charges
Courts may reduce an attorney's requested fees when the billing entries are vague and do
not sufficiently demonstrate what counsel did. See Ryan v. Allied Interstate, Inc., 882 F. Supp.
2d 628,636 (S.D.N.Y. 2012) (citations omitted). A billing entry is vague ifit "lacks sufficient
specificity for the Court to assess the reasonableness of the amount charged in relation to the
work performed." Handschu v. Special Servs. Div., 727 F. Supp. 2d 239,250 (S.D.N.Y. 2010)
19
(internal quotation marks omitted). When this occurs, a percentage reduction is appropriate.
Changxing Liv. Kai Xiang Dong, No. 15-CV-7554 (GBD) (AJP), 2017 WL 892611, at *20
(S.D.N.Y. Mar. 7, 2017), adopted by, 2017 WL 1194733 (Mar. 31, 2017) (collecting cases).
Here, GW's invoices contain a number of overly-generalized billing entries. See, e.g.,
Martin Deel., Exhibit C, at 38 ("OVERVIEW OF MONTEFIORE/MAGNACARE UNION
CLAIMS AND STATUS OF DISCOVERY). The invoices also include numerous conferences
or calls without identifying the subject matter of the work performed. See id. at 60, 88, 101.
This prevents the Court from determining the reasonableness of the amount charged and
therefore requires at least a minimal reduction in fees. See Tucker v. City ofNew York, 704 F.
Supp. 2d 347,356 (S.D.N.Y. 2010) (finding that time entries stating a "'conference with' or 'call
to' a specified person" were impermissibly vague).
ii.
Block-Billed Charges
Block-billing occurs when an attorney groups multiple tasks into a single billing entry.
See Hines v. City ofAlbany, 613 F. App'x 52, 55 (2d Cir. June 3, 2015). This type of billing is
permissible, but only when the records "allow the court to conduct a meaningful review of the
hours requested." Restivo v. Hessemann, 846 F.3d 547,591 (2d Cir. 2017) (citing Merck Eprova
AG v. Gnosis S.P.A., 760 F.3d 247,266 (2d Cir. 2014)). In general, block-billing is problematic
in three circumstances: first, where "large amounts of time (e.g., five hours or more) are block
billed," Beastie Boys v. Monster Energy Co., 112 F. Supp. 3d 31, 53 (S.D.N.Y. 2015); second,
where "there [is] evidence that the hours billed were independently unreasonable," Hnot v. Willis
Grp. Holdings, Ltd., No. 01-CV-6558 (GEL), 2008 WL 1166309, at *6 (S.D.N.Y. Apr. 7, 2008);
and third, where "[the fee applicant] has combined activities compensable at different rates."
20
G.B. ex rel. NB. v. Tuxedo Union Free Sch. Dist., 894 F. Supp. 2d 415,441 (S.D.N.Y. 2012)
(citing Hnot, 2008 WL 1166309, at *6).
The Fund contends that GW's block-billing warrants a 90% reduction in fees. Def. 's Br.
at 15. This argument is unpersuasive. Many of the block-billed entries contain fewer than six
hours of work. See, e.g., Martin Deel., Exhibit C, at 23-24, 38-40, 123-24, 157-59, 247-48,
291-92. In addition, for some of the longer entries, GW provided sufficient detail so as to afford
reasonable confidence that the time billed was spent productively. For example, time spent
drafting dispositive motions was often organized in a block-billed format. See id. at 128, 15455, 183-84, 190,209,233,237,244,280. Because the entries "encompass[] a series ofrelated
tasks" and "sufficiently enumerate[] the work completed," no significant reduction is warranted.
Congregation Rabbinical College ofTartikov, Inc. v. Village ofPomona, 188 F. Supp. 3d 333,
343 (S.D.N.Y. 2016) (collecting cases).
Nevertheless, other portions of GW's legal bills are more concerning. During discovery
in the First Action, GW occasionally combined more than six hours of work on multiple tasks
into a single time entry, without specifying the time on each task. Martin Deel., Exhibit C, at 40,
60, 62, 68. Unlike the entries cited above, the tasks are not so related that the Court can
determine whether the hours were reasonably expended. Similar problems arise with GW's trial
preparation, which included several entries for ten hours or more. Id at 84-85, 88-89, 93, 105.
In addition, the Fund correctly points out that Martin's travel time is often block-billed. Id. at
23, 45, 60, 62, 69, 91, 193. Because courts regularly reduce attorneys' fees by 50% for travel
time, it is not appropriate to include these fees with activities that are fully compensable. See
Robinson v. City ofNew York, No. 05-CV-9545 (GEL), 2009 WL 3109846, at *6 (S.D.N.Y.
Sept. 29, 2009). Accordingly, GW's block-billing warrants a reduction in the requested fee.
21
iii.
Charges for Clerical Work
Clerical work is part of a firm's overhead and cannot be included in a request for
attorneys' fees. O.R. v. New York City Dep 't of Educ., 340 F. Supp. 3d 357, 368 (S.D.N.Y.
2018). Clerical tasks include, among other things, downloading, scanning, copying, and
organizing files. Siegel v. Bloomberg LP, No. 13-CV-1351 (DF), 2016 WL 1211849, at *7
(S.D.N.Y. Mar. 22, 2016).
Here, it appears that three ofGW's paralegals performed exclusively clerical work. Ellen
H. Huggler and James C. Dunne organized documents, and Jennifer Ruzicka assisted in
assembling binders. Martin Deel., Exhibit C, at 89 (Huggler); 92 (Ruzicka); 93-94 (Dunne).
These entries, which total 11.2 hours, must thus be excluded from Montefiore's fee award.
Although GW's legal bills include other billing entries for clerical work, the Court cannot
determine the exact number of hours expended because the entries are often block-billed. See id.
at 24, 34, 61 (scanning); 50, 60, 90 (copying); 93,247 (organizing). Accordingly, an additional
percentage reduction is appropriate. See McDonald v. Pension Plan ofNYSA-ILA Pension Tr.
Fund, No. 99-CV-9054 (NRB), 2002 WL 1974054, at *3 (S.D.N.Y. Aug. 27, 2002) (reducing
hours sought by 5% to account for time spent on clerical services).
iv.
Appropriate Percentage Reduction
Courts may apply an across-the-board percentage cut "as a practical means of trimming
fat from a fee application." Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (quoting
Carey, 711 F.2d at 1146). Fee reductions around 30% are common in this District to reflect
considerations of whether work performed was necessary, leanly staffed, or properly billed. See
Beastie Boys, 112 F. Supp. 3d at 57; accord Genger v. Genger, No. 14-CV-5683, 2015 WL
22
1011718, at *2 (S.D.N.Y. Mar. 9, 2015) ("Across-the-board reductions in the range of 15% to
30% are appropriate when block billing is employed.").
Based on the billing deficiencies identified above, the Court will reduce Montefiore's
proposed hours by 20%. This reduction ensures that Montefiore does not recover for clerical
work, improper block-billing, and vague billing entries. In addition, the Court's determination
also accounts for other unreasonably expended hours. This includes, among other things,
charges for unrelated activities (such as meetings with the Department of Labor or work
performed exclusively on the Third Action), charges for overstaffed or duplicative work (such as
spending over 60 hours drafting a reply brief on appeal and over 46 hours drafting the reply brief
for this motion), and charges for requests for extensions of time, which typically are not
compensated in this District. See Martin Deel., Exhibit C, at 62, 119 (DOL); 183-84 (appellate
reply brief); id, Exhibit D, at 6, 11, 44 (Third Action); Martin Reply Aff. ,r 22 (fees reply brief).
The Fund's arguments for a greater reduction are unavailing. For example, the Fund
contends that it cannot determine which charges were included in Montefiore's fee request
because several legal bills are partially redacted. See Def.'s Br. at 12-13. Montefiore makes
clear, however, that all of the redacted charges were excluded from its calculations. See Martin
Deel.
,r 8; Martin Reply Aff. ,r,r 17-19.
This position is confirmed by the detailed spreadsheets
submitted with Montefiore's reply. See Martin Reply Deel., Exhibit C. Accordingly, no
reduction is warranted.
The Fund also points out that GW used the same two billing numbers for the First,
Second, and Third Actions. Def.'s Br. at 16-17. Although true, this does not suggest that
Montefiore's fee award should be reduced. Montefiore excluded most of the charges related to
the Third Action, and the Court has considered any remaining time spent on the Third Action in
23
imposing the 20% reduction. See Martin Reply Aff. ,r 18. Similarly, to account for time spent
on the state law claims in the First Action, the Court has imposed a 75% reduction in the work
performed up to and including the trial before Judge Baer. The Court sees no reason to reduce
Montefiore's fee award any further.
Finally, the cases cited by the Fund are distinguishable. Although courts in this District
have imposed reductions as high as 90%, those cases involved far more serious billing defects
than those present here. See, e.g., Pasini v. Godiva Chocolatier, Inc., 764 F. App'x 94, 95 (2d
Cir. Apr. 10, 2019) (reasoning that the attorney "grossly inflat[ed] the number of hours worked,
such as billing over ... one-third of the total hours ... for work on [his] fee application");
Guardians Ass'n of Police Dep't ofNew Yorkv. City ofNew York, 133 F. App'x 785, 786 (2d
Cir. June 3, 2005) (upholding an 80% reduction of314 billable hours where the litigation was
simple and the attorneys' time records were "seriously deficient"); Lewis v. Roosevelt Island
Operating Corp., No. 16-CV-03071 (ALC) (SN), 2018 WL 4666070, at *7-9 (S.D.N.Y. Sept.,
28, 2018) (imposing a 60% reduction where the plaintiff billed 3,229 hours for a case that
involved eight depositions and did not go to trial).
D.
Costs
Courts typically award "those reasonable out-of-pocket expenses incurred by the attorney
and which are normally charged fee-paying clients." Kindle v. Dejana, 308 F. Supp. 3d 698, 705
(E.D.N.Y. 2018) (quoting Reichman v. Bonsignore, Brignati & Mazzotta, P.C., 818 F.2d 278,
283 (2d Cir. 1987)). The fee applicant bears the burden of adequately documenting and
itemizing the costs requested. Pennacchio v. Powers, No. 05-CV-985 (RRM) (RML), 2011 WL
2945825, at* 1 (E.D.N.Y. July 21, 2011). In particular, the moving party must substantiate its
request with extrinsic proof, such as invoices or receipts. Lee v. Santiago, No. 12-CV-2558
24
(PAE) (DF), 2013 WL 4830951, at *5 (S.D.N.Y. Sept. 10, 2013). A declaration under penalty of
perjury that certain amounts were expended on particular costs may also be sufficient. Id.
Here, Montefiore should be awarded the costs it incurred in litigating its ERISA claims in
the First and Second Actions. Montefiore detailed its costs in the monthly legal bills that were
filed with the Court. Additionally, as part of its reply, Montefiore provided "cost detail reports"
that show all of the requested costs have been fully paid. Dkt. No. 151, Declaration of Thom
Capobianco ("Capobianco Deel.") 1 11 & Exhibits D & E. This is more than sufficient to justify
Montefiore' s request.
Lastly, the Fund claims that several ofMontefiore's photocopying charges are excessive.
Def.'s Br. at 10. Given the duration and scope of these litigations-and given that Montefiore
has already paid the expenses in their entirety- the Court finds that GW's photocopying was
reasonable. That said, as Montefiore admits, a small number of costs are irrelevant to the First
and Second Actions. Accordingly, the $13.09 charged for a FedEx transaction to George Sikes
cannot be recovered. Martin Deel., Exhibit C, at 195.
CONCLUSION
Montefiore's motion for attorneys' fees and costs is GRANTED in part and DENIED in
part. Specifically, the Court (I) approves the hourly rates proposed by Montefiore; (2) applies a
75% reduction for fees and costs incurred up to and including the trial in the First Action, but
otherwise adopts Montefiore's reductions as proposed; (3) excludes 11.2 hours billed by three of
GW's paralegals; (4) imposes an additional 20% reduction on the total number of hours
expended; and (5) removes $13.09 in costs. Within seven days of the date of this Opinion &
Order, Montefiore is directed to submit a proposed judgment consistent with this ruling for the
Court's consideration.
25
The Clerk of the Court is respectfully directed to terminate the motions at Docket Nos.
142 (09-CV-3096) and 105 (14-CV-10229).
SO ORDERED.
Dated: September 19, 2019
New York, New York
Ronnie Abrams
United States District Judge
26
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