Groth v. CenturyLink Disability Plan
Filing
34
OPINION AND ORDER granting 25 Motion for Attorney Fees. The Court AWARDS plaintiff an attorney fee in the amount of $19,455.00 and $113.93 in non-taxable costs, for a total award of $19,568.93. Signed by Magistrate Judge Norah McCann King on 3/25/2015. (pes1)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
STACIE GROTH,
Plaintiff,
vs.
Civil Action 2:13-cv-1238
Magistrate Judge King
CENTURYLINK DISABILITY PLAN,
Defendant.
OPINION AND ORDER
This matter is before the Court, with the consent of the parties
pursuant to 28 U.S.C. § 636(c), for consideration of Plaintiff’s
Motion for Attorney’s Fees and Non-Taxable Costs (“Plaintiff’s
Motion”), ECF 25.
Plaintiff specifically seeks an award of $19,455.00
in attorney’s fees and $113.93 in non-taxable costs under 29 U.S.C. §
1132(g).
Id. at p. 12.
Defendant opposes Plaintiff’s Motion,
Defendant’s Memorandum in Opposition to Plaintiff’s Motion for
Attorneys’ Fees and Non-Taxable Costs (“Defendant’s Response”), ECF
28, and plaintiff has filed a reply, Plaintiff’s Reply in Support of
Her Motion for Attorney’s Fees and Non-Taxable Costs, ECF 30.
For the
reasons that follow, Plaintiff’s Motion is GRANTED.
I.
Background
This is an action under the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1132 (“ERISA”), in which plaintiff Stacie
Groth sought recovery of short-term disability benefits under an
employer-sponsored plan.
On December 30, 2014, this Court denied the
motion for judgment on the administrative record filed on behalf of
defendant CenturyLink Disability Plan (“defendant” or the “Plan”) and
granted plaintiff’s motion for judgment on the administrative record.
Opinion and Order, ECF 23. Specifically, the Court held that the
Plan’s denial of plaintiff’s application for short-term disability
benefits was arbitrary and capricious because the Plan’s administrator
arbitrarily disregarded the medical evidence proffered by plaintiff.
Id. at p. 16.
The Court reasoned that the administrative decision
“did not indicate that the medical evidence proffered by plaintiff was
actually reviewed, nor did it indicate whether or why the assessments
of [plaintiff’s treating providers] Dr. Wolf and Ms. Harris were
rejected,”
id. at p. 14, failed to provide any discussion of the
opinions of reviewing physicians Marcus Goldman, M.D., and Harold K.
Gever, M.D., and “failed to address the inconsistencies between Dr.
Goldman’s and Dr. Gever’s assessments,”
id. at pp. 14-15.
Absent some explanation for the denial of benefits or
discussion of plaintiff’s medical evidence, the opinions of
Dr. Wolf and Ms. Harris, or the conflict between Dr.
Goldman and Dr. Gever’s opinions, see Evans, 434 F.3d at
877 (indicating that a plan administrator may choose to
rely on the medical opinion of one doctor over another, so
long as the administrator offers a reasonable explanation
based on the evidence for its decision); Roumeliote v. Long
Term Disability Plan for Emps. of Worthington Indus., 475
F. Supp. 2d 742, 746 (S.D. Ohio 2007), aff'd, 292 F. App'x
472 (6th Cir. 2008), the Court cannot say that the denial
of benefits was “the result of a deliberate principled
reasoning process,” see Evans, 434 F.3d at 876, or that the
Plan provided plaintiff with “specific reasons” for the
denial of benefits.
See 29 U.S.C. § 1133(1); Black &
Decker Disability Plan, 538 U.S. at 830. Accordingly, this
Court concludes that defendant’s denial of plaintiff’s
claim for benefits was arbitrary and capricious.
Opinion and Order, ECF 23, pp. 16-17.
The Court remanded the matter
to defendant’s third party administrator “to conduct a full and fair
review and to issue a decision that reflects a deliberate and
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principled reasoning process.”
II.
Id. at p. 17.
Standard
In an action by an ERISA plan participant, “the court in its
discretion may allow a reasonable attorney’s fee and costs of action
to either party,” 29 U.S.C. § 1132(g)(1), “as long as the fee claimant
has achieved ‘some degree of success on the merits.’”
Hardt v.
Reliance Standard Life Ins. Co., 560 U.S. 242, 245 (2010) (quoting
Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983)).
Once a fee
claimant satisfies the threshold requirement of achieving “some degree
of success on the merits,” courts in this circuit 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 or
resolve significant legal questions regarding ERISA; and
(5) the relative merits of the parties' positions.”
McKay v. Reliance Standard Life Ins. Co., 428 F. App'x 537, 546 (6th
Cir. 2011) (quoting Gaeth v. Hartford Life Ins. Co., 538 F.3d 524, 529
(6th Cir. 2008)).
“No single factor is determinative.”
Id. (citing
Gaeth, 538 F.3d at 529).
III. Discussion
As an initial matter, the Court must determine whether plaintiff
achieved “some degree of success on the merits.”
255.
Hardt, 560 U.S. at
This standard is not satisfied by achieving “‘trivial success on
the merits’ or a ‘purely procedural victor[y],” but is satisfied “if
the court can fairly call the outcome of the litigation some success
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on the merits without conducting a ‘lengthy inquir[y] into the
question whether a particular party's success was substantial or
occurred on a central issue.’”
Id. (internal quotations omitted;
alteration in original).
Here, the Court concluded that the Plan’s denial of benefits to
plaintiff was arbitrary and capricious and remanded the matter to the
Plan’s third party administrator “to conduct a full and fair review
and to issue a decision that reflects a deliberate and principled
reasoning process.”
Opinion and Order, ECF 23, p. 17.
In making this
determination, the Court found that the Plan’s third party
administrator had arbitrarily disregarded the medical evidence
proffered by plaintiff, failed to offer a reasonable explanation based
on the evidence for its decision, and failed to discuss and resolve
conflicts between the reviewing physicians’ opinions.
17.
Id. at pp. 16-
Although the Court did “not believe that the record clearly
establishe[d] that plaintiff [was] entitled to benefits,” the matter
was remanded for further consideration.
Id.
Courts in this circuit
have found that such a remand order is a sufficient degree of success
on the merits to permit an award of attorney’s fees.
See McKay, 428
F. App'x at 546; Bowers v. Hartford Life & Acc. Ins. Co., No. 2:09-CV290, 2010 WL 4117515, at *2 (S.D. Ohio Oct. 19, 2010) (“Since Hardt,
lower courts have determined that a remand requiring the plan
administrator to address deficiencies in the original review of a
plaintiff's claim constitutes ‘some success on the merits’ even if the
district court made no determination regarding the plaintiff's
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disability status.”) (citing Richards v. Johnson & Johnson, No. 2:08–
cv–279, 2010 WL 3219133, at *3 (E.D. Tenn. Aug. 12, 2010)); Potter v.
SABIC Innovative Plastics US, LLC, No. 2:10-CV-696, 2011 WL 4852334,
at *3 (S.D. Ohio Oct. 13, 2011).
Having concluded that plaintiff has
achieved some degree of success on the merit, the Court will now turn
to the five factors.
The first factor requires the Court to consider “the degree of
the opposing party’s culpability or bad faith.”
McKay, 428 F. App’x
at 546; Moon v. UNUM Provident Corp., 461 F.3d 639, 642 (6th Cir.
2006).
This Court’s finding that the Plan’s denial of benefits was
arbitrary and capricious does not necessarily indicate culpability or
bad faith.
See Moon, 461 F.3d at 643 (quoting Heffernan v. UNUM Life
Ins. Co. of Am., 101 F. App’x 99, 109 (6th Cir. 2004)).
“Rather, ‘the
Court considers the circumstances surrounding the denial,’ in order to
determine the level of Defendant's culpability or bad faith.”
Bowers,
2010 WL 4117515 at *3 (quoting Kauffman v. Sedalia Med. Ctr., Inc.,
No. 2:04–CV–543, 2007 WL 490896, at *1 (S.D. Ohio Feb. 9, 2007)).
Here, there is no suggestion that defendant acted in bad faith.
However, the Court finds that defendant was culpable in denying
plaintiff’s application for benefits.
The United States Court of
Appeals for the Sixth Circuit has found the culpability requirement
met where “a plan administrator engages in an inadequate review of the
beneficiary's claim or otherwise acts improperly in denying benefits.”
Shelby Cnty. Health Care Corp. v. Majestic Star Casino, 581 F.3d 355,
377 (6th Cir. 2009).
Here, the Court found that the Plan had
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arbitrarily disregarded the medical evidence proffered by plaintiff
and failed to offer a reasonable explanation based on the evidence for
its decision.
Opinion and Order, ECF 23, pp. 16-17.
Defendant also
failed to provide any discussion of the opinion evidence and failed to
address the inconsistencies between the assessments of the paper
reviewing physicians.
Id. at pp. 14-15.
of the evidence was entirely inadequate.
In short, the Plan’s review
Defendant was therefore
culpable in denying benefits, see Moon, 461 F.3d at 643-44 (reversing
the district court and weighing the culpability factor in favor of the
claimant where the administrator's physician conducted only a paper
review that failed to take into account treating physicians'
opinions); Bowers, 2010 WL 4117515 at *3, and the first factor weighs
in favor of awarding attorney’s fees.
Defendant “does not dispute that it has the ability to satisfy an
award of attorney’s fees.”
Defendant’s Response, p. 2.
The second
factor therefore weighs in favor of awarding attorney’s fees.
The third factor requires the Court to consider “the deterrent
effect of an award on other persons under similar circumstances.”
McKay, 428 F. App’x at 546.
“The key question in analyzing this third
factor is . . . whether the fee award would have a deterrent effect on
other plan administrators.”
Gaeth, 538 F.3d at 532.
The deterrent
effect “is likely to have more significance in a case where the
defendant is highly culpable, where “deliberate misconduct is in the
offing,” rather than when the plan administrator makes an “honest
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mistake.”
Foltice v. Guardsman Prods., Inc., 98 F.3d 933, 937 (6th
Cir. 1996).
Here, defendant’s third party administrator denied plaintiff’s
application for benefits without discussing the medical evidence or
the medical opinions of record, and it was culpable in doing so.
An
award of attorney’s fees under these circumstances can have a
deterrent effect because such an award will warn other plan
administrators of important principles that all plan administrators
should heed: a plan administrator cannot deny an application for
benefits without a review of the medical evidence and medical opinions
and without providing an explanation for the decision.
See Moon, 461
F.3d at 645 (finding that there is a deterrent effect where important
principles that all plan administrators should heed are articulated:
“For example, before terminating a plan participant's benefits, a plan
administrator should ensure that the opinions upon which they rely to
make their decisions to terminate are based on a thorough review of
the administrative record.”); Williams v. Hartford Life & Accident
Ins. Co., No. 2:08-CV-128, 2010 WL 3463347, at *2 (S.D. Ohio Aug. 27,
2010); Potter, 2011 WL 4852334 at *5-6.
Accordingly, this factor
weighs in favor of awarding attorney’s fees.
The fourth factor, i.e., whether plaintiff sought to confer a
common benefit on plan participants or resolve significant legal
questions regarding ERISA, is not in dispute.
Plaintiff concedes that
the fourth factor “does not weigh in favor of a fee award” because
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plaintiff did not seek to confer a common benefit or resolve
significant legal questions.
Plaintiff’s Motion, p. 9.
The fifth factor is “the relative merits of the parties'
positions.”
McKay, 428 F. App'x at 546.
Although, as defendant
argues, Defendant’s Response, pp. 5-6, plaintiff was not awarded
benefits and she did not prevail on a number of arguments, she was
nevertheless able to overcome “the highly deferential arbitrary and
capricious standard to achieve a remand.”
546.
See McKay, 428 F. App’x at
Moreover, defendant was obviously culpable in its decision to
arbitrarily and capriciously deny plaintiff’s application for
benefits.
The fifth factor therefore weighs in favor of an award of
attorney’s fees.
See Moon, 461 F.3d at 646.
In sum, four of the five factors weigh in plaintiff’s favor.
The
Court therefore finds that an award of attorney’s fees is appropriate.
As noted supra, plaintiff seeks an award of $19,455.00 in
attorney’s fees and $113.93 in non-taxable costs under 29 U.S.C. §
1132(g).
Plaintiff specifically seeks $17,887.50 for 47.7 attorney
hours billed at the rate of $375 per hour, $187.50 for 1.5 paralegal
hours billed at the rate of $125 per hour, and $1,380 for 11.5 law
clerk hours billed at the rate of $120 per hour.
Plaintiff’s Motion,
p. 12.
ERISA allows courts in their discretion to award “a reasonable
attorney's fee and non-taxable costs of action to either party.”
U.S.C. § 1132(g)(1).
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Thus, the inquiry now turns to what attorney's
fee is “reasonable” in this case.
“Reasonable” attorney’s fees are
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calculated in light of the prevailing market rates in the relevant
community.
See Binta B. ex rel S.A. v. Gordon, 710 F.3d 608, 627 (6th
Cir. 2013) (“Reasonable attorney's fees under § 1988 should be
calculated according to the prevailing market rates in the relevant
community.”); Geier v. Sundquist, 372 F.3d 784, 791 (6th Cir. 2004);
Boost Worldwide, Inc. v. Cell Station Wireless, Inc., No. 2:13-CV-490,
2014 WL 47977, at *5 (S.D. Ohio Jan. 7, 2014) (“Courts determine a
reasonable hourly rate based on the prevailing market rate in the
relevant community for lawyers of comparable skill and experience.”).
In determining a reasonable fee award, a court begins by calculating
the movant’s “lodestar,” “which is the proven number of hours
reasonably expended on the case by an attorney, multiplied by a
reasonable hourly rate.”
Binta B., 710 F.3d at 627 (quoting Isabel v.
City of Memphis, 404 F.3d 404, 415 (6th Cir. 2005)).
It follows that
hours that are “excessive, redundant, or otherwise unnecessary,” i.e.,
hours that are not “reasonably expended,” should be excluded from the
initial fee calculation.
citations omitted).
Id. at 627-28 (internal quotation marks and
Once the initial lodestar calculation is
determined, the court may modify the award in light of “relevant
considerations peculiar to the subject litigation.”
Sec’y of Treasury, 227 F.3d 343, 349 (6th Cir. 2000).
Adcock-Ladd v.
Specifically, a
court may consider the following factors:
(1) the time and labor required by a given case; (2) the
novelty and difficulty of the questions presented; (3) the
skill needed to perform the legal service properly; (4) the
preclusion of employment by the attorney due to acceptance
of the case; (5) the customary fee; (6) whether the fee is
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fixed or contingent; (7) 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) awards in similar
cases.
Smith v. Serv. Master Corp., 592 F. App’x 363, 369-70 (6th Cir. 2014)
(quoting Adcock-Ladd, 227 F.3d at 349 n.8)).
Plaintiff has presented uncontested evidence that the hourly
rates charged by her counsel and the number of hours billed are
reasonable.
See Affidavit of Tony C. Merry, attached to Plaintiff’s
Motion as Exhibit A.
Defendant has not objected to the number of
hours billed by plaintiff’s counsel or the hourly rates charged, and
there is no indication that the time billed is improper or excessive.
After reviewing counsel’s billing statement, the Court concludes that
the number of hours billed by plaintiff’s counsel is reasonable.
The
Court also finds that plaintiff’s counsel’s hourly rates are
reasonable and consistent with the hourly rates charged by counsel of
comparable skill and experience in the local community.
See Javery v.
Lucent Techs. Inc. Long-Term Disability Plan for Mgmt. or LBA Emps.,
No. 2:09-CV-00008, 2014 WL 2779427, at *7-8 (S.D. Ohio June 19, 2014)
(recognizing plaintiff’s counsel as “one of the preeminent local
practitioners in the areas of ERISA disability law,” approving
plaintiff’s counsel’s hourly rate of $375 per hour, and noting that an
hourly rate of $125 for paralegals is “fairly typical in this Court's
experience”); Kehoe Component Sales Inc. v. Best Lighting Prods.,
Inc., No. 2:10-CV-00789, 2014 WL 5034643, at *8 (S.D. Ohio Oct. 8,
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2014) (finding paralegal and law clerk hourly rates of $125 to be
reasonable).
In a footnote, defendant argues that the fees requested by
plaintiff should be reduced “by at least 50%” because of “the very
limited success achieved by Plaintiff.”
n.1.
Defendant’s Response, p. 6
Defendant argues that a reduction is necessary because
plaintiff’s counsel did not prevail on many of his arguments.
Defendant’s argument is not well taken.
Id.
As discussed supra, in
achieving a remand of the matter, plaintiff was able to overcome the
highly deferential arbitrary and capricious standard.
The Court did
not award benefits because the record did not clearly establish that
plaintiff was entitled to benefits.
Opinion and Order, ECF 23, p. 17.
The results achieved by plaintiff were nevertheless significant and do
not warrant a reduction in plaintiff’s fee award.
Considering all the relevant factors, then, the Court concludes
that $19,455.00 is a reasonable attorney’s fee in this action.
Plaintiff has also requested $113.93 in non-taxable costs.
Defendant does not object to this request, and the Court finds that
the non-taxable costs requested are reasonable.
WHEREUPON Plaintiff’s Motion for Attorney’s Fees and Non-Taxable
Costs, ECF 25, is GRANTED.
The Court AWARDS plaintiff an attorney fee
in the amount of $19,455.00 and $113.93 in non-taxable costs, for a
total award of $19,568.93.
March 25, 2015
s/Norah McCann King_______
Norah McCann King
United States Magistrate Judge
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