Laake v. The Benefits Committee, Western & Southern Financial Group Company Flexible Benefits Plan et al
Filing
124
ORDER - IT IS ORDERED that: (1) The Court GRANTS IN-PART and DENIES IN-PARTPlaintiffs Motion for Prejudgment Interest and Attorneys Fees and Costs. (Doc. 115). (2) The Court GRANTS Plaintiff 3.5% in prejudgment interest compounded annually, cal culated from October 16, 2018 until November 5, 2021. (3) The Court DENIES Plaintiffs request for a paralegal rate of $125 per hour and reduces the awarded paralegal rate to $50 per hour worked. (4) The Court GRANTS Plaintiff request for attorneys fees, but reduces the overall amount by 33% from the $182,547.50 requested. (5) The Court GRANTS Plaintiff the costs requested in her Motion in the amount of $2,600.70. (6) Plaintiff shall file a proposed judgment with the Court ON OR BEFORE MONDAY, FEBRUARY 7, 2022. Defendants shall file any objections to the proposed judgment ON OR BEFORE MONDAY, FEBRUARY 14, 2022. Signed by Judge William O. Bertelsman on 01/31/2022. (bjc)
Case: 1:17-cv-00611-WOB-KLL Doc #: 124 Filed: 01/31/22 Page: 1 of 13 PAGEID #: 6926
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT CINCINNATI
CIVIL ACTION NO. 1:17-cv-611 (WOB-KLL)
SHERRY LAAKE,
VS.
PLAINTIFF
MEMORANDUM OPINION AND ORDER
THE BENEFITS COMMITTEE,
WESTERN & SOUTHERN FINANCIAL
GROUP COMPANY FLEXIBLE BENEFITS
PLAN, ET AL.
DEFENDANTS
This long-term disability benefits (LTD) case is before the
Court
on
Plaintiff’s
Motion
Attorney’s Fees and Costs.
for
Prejudgment
Interest
and
(Doc. 115).
On November 6, 2021, this Court issued its Memorandum Opinion
and Order, (Doc. 114), granting Plaintiff LTD benefits, statutory
penalties, and attorney’s fees through January 24, 2020. The Court
gave Plaintiff through December 1, 2021, to file any remaining
motions before entering its final judgment. Plaintiff timely filed
her Motion for Prejudgment Interest and Attorney’s Fees and Costs,
(Doc. 115), and Defendants filed their response. (Doc. 119).
Having reviewed this matter, the Court now issues the following
Memorandum Opinion and Order.
Factual and Procedural Background
The factual and procedural background relating to the merits
of this case is described in greater detail in the Court’s previous
Memorandum Opinion and Order.
(Doc. 114).
1
In that Order, the
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Court was evaluating the parties’ Cross-Motions for Judgment on
the Administrative Record, (Docs. 94; 95), Plaintiff’s Motion for
Summary
Judgment,
(Doc.
98),
Plaintiff’s
Motion
to
Strike
Deposition Errata Sheets, (Doc. 101), and Plaintiff’s Motion and
Supplemental Motion for Attorney’s Fees and Costs. (Docs. 31; 40).
The Court denied Defendants’ Motion for Judgment on the
Administrative Record and granted Plaintiff’s Motion awarding LTD
benefits. The Court denied Plaintiff’s Motion for Summary Judgment
because it was untimely, but still awarded statutory penalties.
The Court further denied Plaintiff’s Motion to Strike as moot, but
nonetheless noted the egregious nature of Defendants’ errata sheet
corrections. Finally, the Court awarded Plaintiff $108,394.47 in
attorney’s fees and costs for work done through January 24, 2020.
(See generally Doc. 114).
Plaintiff
has
since
filed
an
additional
Motion
for
Prejudgment Interest and Attorney’s Fees and Costs for the work
her counsel performed beyond January 24, 2020.
(Doc. 115).
In
the Motion, Laake asks the Court to award 6.2% in prejudgment
2
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interest for the LTD benefits, $182,547.50 in attorney’s fees, and
$2,600.70 in legal costs.
(Id. at 4).1
Defendants oppose an award of any additional attorney’s fees,
but argue that should the Court grant Plaintiff’s Motion, the fees
should at least be reduced.
(Doc. 119).
Specifically, they argue
that Laake’s attorney billed an unreasonable number of hours, many
of which were devoted to unsuccessful issues.
They also argue
that Laake’s attorney’s time sheets are impermissibly vague, and
they attempt to recover for clerical tasks.
Further, they argue
that the 6.2% percent prejudgment interest rate Plaintiff proposes
is too high, and the Court should instead apply the rate set forth
by 28 USC § 1961—which would allow for roughly 1.2% in prejudgment
interest.
ANALYSIS
A. Prejudgment Interest
The Court begins by evaluating the parties’ arguments for the
proper prejudgment interest rate.
1
Courts may award prejudgment
Shortly after Plaintiff filed this Motion, (Doc. 115), Defendants filed
an appeal with the Sixth Circuit. (Doc. 117). “As a general rule, the
district court loses jurisdiction over an action once a party files a
notice of appeal, and jurisdiction transfers to the appellate court.”
Lewis v. Alexander, 987 F.2d 392, 394 (6th Cir. 1993). However, “the
district court retains jurisdiction over an action when an appeal is
untimely, is an appeal from a non-appealable non-final order or raises
only issues that were previously ruled upon in that case by the appellate
court.” Id. at 394–95 (citing Rucker v. United States Dept. of Labor,
798 F.2d 891, 892 (6th Cir. 1986). The Court has not yet entered an
appealable final judgment; therefore, this Court retains jurisdiction
to adjudicate this motion despite the docketed appeal.
3
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interest to “compensate plaintiffs for the lost interest value of
money wrongly withheld.”
Schumacher v. AK Steel Corp. Retirement
Accumulation Pension Plan, 711 F.3d 675, 686 (6th Cir. 2013).
An
award that is too high may “contravene ERISA’s remedial goal of
simply placing the plaintiff in the position he or she would have
occupied
but
for
the
defendant’s
wrongdoing.”
Id.
But
an
“exceedingly low prejudgment interest rate fails to make the
plaintiff whole.”
prejudgment
Id.
interest
Although courts often apply the statutory
rate
under
28
USC
§
1961(a),
such
a
“mechanical application of the rate . . . amounts to an abuse of
discretion.”2
Id.
The Sixth Circuit has instructed courts to consider casespecific factors
interest rate.
when determining the appropriate prejudgment
These factors include the remedial goal of making
the plaintiff whole, the prevention of unjust enrichment on behalf
of
the
wrongdoer,
the
lost
interest
withheld, and the rate of inflation.
value
of
Id. at 687.
money
wrongly
Still, “district
courts may fashion an award in their sound discretion.”
Id.
Applying these principles, the Court finds that the 1.2%
prejudgment interest rate under § 1961 is too low to properly
2
Plaintiff argues that the Court should apply the interest rates set
forth by Ohio law. This position is not consistent with Sixth Circuit
precedent. Rybarczyk v. TRW, Inc., 235 F.3d 975, 985 (6th Cir. 2000)
(“Among the constraints on a district court’s discretion to shape an
award of prejudgment interest in an ERISA case is the fact that we look
with disfavor on simply adopting state law interest rates. ERISA is not
an area primarily of state concern.”).
4
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compensate Plaintiff.
Defendants specifically request the Court
to award interest rates of 2.33% (2018), 2.05% (2019), 0.37%
(2020), and 0.09% (2021).
The Court declines to do so.
First, Plaintiff was forced to forgo certain treatments for
her pain because she could not afford them due to Defendants’
denial of LTD coverage.
(Doc. 77 at 19; 286).
Thus, a mere 1.2%
interest rate does not go far enough to make Plaintiff whole.
Second, the rates set forth in § 1961 would allow Defendants to
benefit from historically low treasury bond rates, which would
lead to unjust enrichment.3
Third, a 1.2% prejudgment interest
rate also does not compensate for the lost interest value for the
time it was wrongly withheld.
See Schumaker, 711 F.3d at 686–87
(“A district court’s award of prejudgment interest that only
compensated the plaintiffs for the rate of inflation constituted
an abuse of discretion where it failed to adequately compensate
them for the lost use of their money.”).
Fourth, the increasing
rate of inflation, now upwards of 7%, warrants a higher award of
prejudgment interest.4
However, the Court also finds that a 6.2% prejudgment interest
rate transforms the award from compensatory to punitive in nature.
3
See U.S. Dep’t of the Treasury, Daily Treasury Par Yield Curve Rates
(2022),
https://www.treasury.gov/resource-center/data-chartcenter/interest-rates/pages/textview.aspx?data=yield.
4 See U.S. Bureau of Labor Statistics, Consumer Price Index: 2021 in
Review (2022), https://www.bls.gov/opub/ted/2022/consumer-price-index2021-in-review.htm.
5
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See Masters v. Supp. Exec. Retirement Plan for Auto. Packaging
Sys. Inc., et al., No. 5:07-cv-1826, 2009 WL 1183377, at *2 (N.D.
Ohio May 1, 2009).
Therefore, having considered the four factors,
the Court grants Plaintiff an award of 3.5% prejudgment interest,
compounded annually.
This rate more closely reflects the § 1961
rates before they significantly dropped, while still taking into
consideration the rapid rate of inflation the U.S. dollar has
undergone
in
recent
years.
This
3.5%
rate
is
reasonable
considering the circumstances and will compensate Plaintiff for
the loss of her disability benefits to which she is legally
entitled.
Id.; see also Herring v. SCI Tenn. Funeral Servs., LLC,
No. 2:15-cv-280, 2018 WL 4869166, at *2 (E.D. Tenn. Apr. 2, 2018)
(awarding 5% prejudgment interest when § 1961 was too low).
The
Court does not find that this amount of prejudgment interest
constitutes a windfall for either party.
B. Attorney’s Fees
Plaintiff also moves the Court to award her attorney’s fees
for the work her counsel performed after January 24, 2020.
The
Motion requests payment in the amount of $182,547.50 for 599.2
attorney hours and 21.4 paralegal hours.
at ¶¶ 11; 16).
(Doc. 115-1, Danzl Decl.
Defendants argue that the number of hours worked
was unreasonable and should be reduced.
As explained further
below, while Plaintiff is entitled to additional attorney’s fees,
the Court agrees with Defendants that a reduction is warranted.
6
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As a threshold matter, the Court applies a two-part test to
determine whether an award of attorney’s fees is appropriate.
First, courts consider whether the plaintiff has achieved some
degree of success on the merits.
Hardt v. Reliance Standard Life
Ins. Co., 130 S. Ct. 2149, 2158 (2010). Next, in the Sixth Circuit,
courts consider the following five factors: (1) the degree of the
opposing party’s culpability or bad faith; (2) the opposing party’s
ability to satisfy an award of attorney’s fees; (3) the deterrent
effect of an award on other persons under similar circumstances;
(4) whether the party requesting fees sought to confer a common
benefit on all participants and beneficiaries of an ERISA plan;
and (5) the relative merits of the parties’ positions. Secretary
of Dep’t of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985).
The
Court has already analyzed these factors in its previous Memorandum
Opinion
and
Order,
(Doc.
114),
and
hereby
incorporates
its
reasoning by reference and finds that Plaintiff is entitled to
attorney’s fees.
Once courts decide to award attorney’s fees, they must then
consider “whether a reasonable attorney would have believed the
work to be reasonably expended in pursuit of success at the point
in time when the work was performed.” Wooldridge v. Marlene Indus.
Corp., 898 F.2d 1169, 1177 (6th Cir. 1990).
“The most useful
starting point . . . is the number of hours reasonably expended on
7
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the litigation multiplied by a reasonable hourly rate.”
Hensley
v. Eckerhart, 461 U.S. 424, 433 (1983).
The Court has already found that Counsel Claire Danzl’s rate
of $300 per hour was reasonable given her experience and the
specialized nature of ERISA litigation.
(Doc. 114 at 39).
On
January 1, 2021, Ms. Danzl’s rate increased to $350 per hour, which
the Court also finds reasonable given her experience as an ERISA
litigator.5
See e.g., Palombaro v. Emery Fed. Credit Union, No.
1:15-cv-792, 2018 WL 5312687, at *6 (S.D. Ohio Oct. 25, 2018)
(allowing a $350 rate for an attorney with twelve years of ERISA
experience).
The Court, however, reduces the paralegal rate to
$50 an hour.
Counsel’s paralegal, Cali Mallone, is still a
student, and the Court finds it is unreasonable to for her to bill
at the same rate as a seasoned paralegal. See Castro v. Los
Camperos, Inc., No. 2:13-cv-1186, 2014 WL 4626292, *4 (S.D. Ohio
Sept. 15, 2014).
The Court next turns to whether the number of hours billed is
the number of hours that an attorney would reasonably expend on
the litigation.
this case.”
“Context informs the time and labor required by
Javery v. Lucent Techs. Inc. Long-Term Disability
Plan for Mgmt. or LBA Emps., No. 2:09-CV-8, 2014 WL 2779427, at *6
(S.D. Ohio June 19, 2014).
It is worth noting that this case has
5
To clarify, the increased rate can only be applied prospectively for
hours billed after January 1, 2021.
8
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been quite unusual
in that the case was remanded, appealed,
reopened, and now appears positioned for another appeal.
Such a
hard-fought case is much more time-consuming and labor-intensive
than the typical disability case. Accordingly, the Court considers
the “reasonableness” prong with this context in mind.
One of the more significant issues the Court finds with
Plaintiff’s request for attorney’s fees is that she seeks to
recover for her time prosecuting issues and claims which were
unsuccessful and, in some instances, unnecessary.
Seiter, 935 F.2d 761, 764 (6th Cir. 1991).
spent roughly 50.3
For example, Ms. Danzl
hours on her untimely
Judgment for her statutory penalties claim.
See Perotti v.
Motion for
Summary
(Doc. 115 at 27–32).
She also spent nearly 45 hours on discovery objections that were
readily discounted by Magistrate Judge Bowman.
(Id. at 26–27).
Additionally, she seeks to recover 4 hours for a motion for leave
because she initially filed the exhibits incorrectly, (Id. at 25),
as well as 5 hours for a motion to compel that was never actually
filed. (Id. at 21).
The Court cannot allow Plaintiff to recover
for such unsuccessful and unnecessary expenses.
The Court also finds issue with the sheer number of hours
Plaintiff’s counsel spent on many of her motions.
The Court finds
it was unreasonable for Plaintiff’s counsel to spend 154.4 hours
on Cross-Motions for Judgment on the Administrative Record.
Much
of the work billed for these motions are excessive, duplicative,
9
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and unnecessary.
Compare Rist v. Hartford Life and Acc. Ins. Co.,
No. 1:05-cv-492, 2011 WL 6101633, *5 (S.D. Ohio Nov. 14, 2011)
(finding 97.7 hours working on dispositive motions was reasonable)
with Citizens for Cmty. Values, Inc. v. Upper Arlington Pub.
Library Bd. of Trs., No. C–2–08–223, 2010 WL 1253892, at *7 (S.D.
Ohio Mar. 24, 2010) (reduction of 233.5 hours appropriate for
unnecessary and redundant work).
occasion,
Plaintiff’s
counsel
For example, on more than one
billed
36
unopposed motion for extension of time.
Additionally,
the
Court
notes
that
minutes
to
draft
an
(Doc. 115-1 at 16; 26).
counsel
excessive hours preparing for depositions.
repeatedly
spent
(Id. at 23–24).
It is
not reasonable for the Court to award these fees, and accordingly
the ultimate award must be reduced.
Furthermore, the Sixth Circuit limits the recovery of fees
for work on a motion for attorney’s fees to “three percent of the
hours in the main case which is decided without trial.”
Auto
Alliance Int’l, Inc. v. United States Customs Serv., 155 F. App’x
226, 229 (6th Cir. 2005).
this limitation.
Plaintiff’s current requests exceed
(Doc. 115-1 at 32).
Plaintiff has requested
repayment for nearly 55 hours in drafting her various motions for
attorney’s
fees.
(Docs.
31;
40;
115).
Though
the
Court
acknowledges the laborious nature of this lawsuit, the Court cannot
grant such a high “fees for fees” request.
Valve Co., 510 F.3d 610, 620 (6th Cir. 2007).
10
See Gonter v. Hunt
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The Court has broad discretion to reduce the amount of hours
Plaintiff may recover.
The Court need not parse through every
entry—rather the court “must simply do rough justice.”
Ne. Ohio
Coal. for the Homeless v. Husted, 831 F.3d 686, 703 (6th Cir. 2016)
(internal quotations omitted); see also Kirsch v. Fleet St., Ltd.,
148 F.3d 149, 173 (2d Cir. 1998) (“The court has discretion simply
to deduct a reasonable percentage of the number of hours claimed
as a practical means of trimming fat from fee application.”).
District courts can apply their own observations of counsels’
conduct over the course of litigation to gauge what is reasonable.
Tyson v. Al Chami, 659 F. App’x 346, 348 (6th Cir. 2016).
Here, the Court acknowledges the very contentious nature of
this litigation.
The Court specifically makes note of Defendants’
dilatory tactics and poor conduct throughout the course of this
now
five-year
long
case.
The
Court
recognizes
the
need
to
compensate Plaintiff’s counsel for her work, particularly given
this Court’s previous findings.
(Doc. 114).
However, for the
reasons articulated above, Plaintiff cannot recover all the fees
she requests.
33%
is
The Court therefore finds an overall reduction of
appropriate.
Such
an
amount
will
fairly
compensate
Plaintiff’s counsel for her work in this arduous case, while not
unfairly penalizing Defendants.
11
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C. Costs
Defendants argue that Laake cannot recover her deposition
costs because they were not “reasonably necessary for use in the
case.”
See Hall v. Ohio Educ. Ass’n, 984 F. Supp. 1144, 1146 (S.D.
Ohio 1997).
The Court finds the deposition costs were reasonably
necessary to show how Laake’s claim was administered internally
within W&S.
The deposition testimony revealed procedural issues
at W&S that entitled Laake to de novo review.
17).
(Doc. 114 at 13–
Accordingly, the deposition costs are reasonable.
CONCLUSION
Therefore, having reviewed this matter, and the Court being
advised,
IT IS ORDERED that:
(1)
The Court GRANTS IN-PART and DENIES IN-PART
Plaintiff’s Motion for Prejudgment Interest and
Attorney’s Fees and Costs.
(2)
(Doc. 115).
The Court GRANTS Plaintiff 3.5% in prejudgment
interest compounded annually, calculated from October
16, 2018 until November 5, 2021.
(3)
The Court DENIES Plaintiff’s request for a paralegal
rate of $125 per hour and reduces the awarded
paralegal rate to $50 per hour worked.
(4)
The Court GRANTS Plaintiff request for attorney’s
fees, but reduces the overall amount by 33% from the
12
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$182,547.50 requested.
(5)
The Court GRANTS Plaintiff the costs requested in her
Motion in the amount of $2,600.70.
(6)
Plaintiff shall file a proposed judgment with the
Court ON OR BEFORE MONDAY, FEBRUARY 7, 2022.
Defendants shall file any objections to the proposed
judgment ON OR BEFORE MONDAY, FEBRUARY 14, 2022.
This 31st day of January 2022.
13
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