Opinion
22 Civ. 2855 (VM)
07-25-2024
E.V. and L.V., Plaintiffs, v. UNITED HEALTHCARE OXFORD et al., Defendants.
DECISION AND ORDER
VICTOR MARRERO, United States District Judge.
Plaintiffs E.V. and L.V. (together, "Plaintiffs") move for an award of attorney's fees against Defendants Oxford Health Plans (NY), Inc. and United Behavioral Health (hereinafter "Defendants" or "United") pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(g) (1) .
On September 27, 2023, the Court granted summary judgment in favor Plaintiffs on their ERISA claim and denied summary judgment with prejudice as to Plaintiffs' claim under the Mental Health Parity and Addiction Equity Act ("Parity Act"). (See E.V. v. United Healthcare, No. 22 Civ. 2855, Op. and Order, Dkt. No. 97, at 25.) That decision ordered Defendants to reimburse Plaintiffs for costs incurred while L.V. was treated at a residential care center from the dates of May 18, 2019, through November 5, 2019, and granted leave to Plaintiffs to move for fees, costs, and interest. (See id.) For the reasons discussed herein, Plaintiff's Motion for Attorney's Fees is GRANTED.
I. BACKGROUND
The Court assumes the reader's familiarity with the facts of this case as set out in the Court's Opinion and Order of September 27, 2023, and explains only the facts necessary to decide the instant motion. (See Dkt. No. 97.) Plaintiff E.V. was a participant in an employee welfare benefits plan (the “Plan” or the “Benefits Plan”) provided by Defendants. Plaintiff L.V., E.V.'s daughter, was a beneficiary of this Plan. Defendants discontinued some of L.V.'s benefits on May 18, 2019, because they found the treatment she was receiving was no longer medically necessary.
After unsuccessfully contesting this determination with Defendants directly and with the New York State Department of Financial Services, Plaintiffs commenced this action alleging two claims: (1) an ERISA claim, the central issue of which was whether L.V.'s treatment at a residential care center was medically necessary within the meaning of E.V.'s healthcare Plan; and (2) a Parity Act claim alleging that United applied more restrictive standards to the mental healthcare benefits L.V. received than to analogous medical and surgical benefits. The Court found that L.V.'s treatment was medically necessary within the terms of the healthcare Plan and that Plaintiffs failed to raise triable issues of fact regarding the Parity Act claim. Accordingly, the Court granted Plaintiffs' request for benefits covering L.V.'s medical treatment and gave Plaintiffs leave to move for attorney's fees, costs, and interest. Plaintiffs moved for attorney's fees, costs, and prejudgment interest on October 27, 2023. (See Dkt. No. 98.)
II. DISCUSSION
Plaintiffs request a total of $48,105 in attorney's fees pursuant to 29 U.S.C § 1132(g)(1), prejudgment interest at 8.5 percent pursuant to 28 U.S.C. § 1961, and $400 in costs under 28 U.S.C. §§ 1920 and 1924. (See Dkt. No. 99, at 2, 13.) Defendants respond that Plaintiffs should be awarded $17,865 in attorney's fees and that the requested interest rate would overcompensate Plaintiffs. (See Dkt. No. 104, at 1.)
A. ENTITLEMENT TO ATTORNEY'S FEES
Pursuant to ERISA, the Court has discretion to award a “reasonable attorney's fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). To be eligible for an award of attorney's fees in an ERISA action, a party need achieve only “some degree of success on the merits.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983)). Even though Plaintiffs did not succeed on their Parity Act claim, they achieved success on the merits of their ERISA claim and are entitled to reasonable attorney's fees. See Hardt, 560 U.S. at 254 (achieving “some success” is what entitles a party to reasonable attorney's fees, rather than total success).
B. REASONABLENESS OF ATTORNEY'S FEES
“Attorneys' fees are awarded by determining a presumptively reasonable fee, reached by multiplying a reasonable hourly rate by the number of reasonably expended hours.” Graziano v. First Unum Life Ins. Co., No. 21 Civ. 2708, 2024 WL 1175143, at *2 (S.D.N.Y. Mar. 19, 2024) (quoting Bergerson v. N.Y. State Off. of Mental Health, 652 F.3d 277, 289 (2d Cir. 2011)).
1. Reasonable Rate
“The reasonable hourly rate is the rate a paying client would be willing to pay,” and “a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively.” Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008). Factors that relate to what a reasonable client would be willing to pay include: (1) “the complexity and difficulty of the case,” (2) “the available expertise and capacity of the client's other counsel (if any),” (3) “the resources required to prosecute the case effectively,” (4) “the timing demands of the case,” (5) “whether an attorney might have an interest (independent of that of his client) in achieving the ends of the litigation or might initiate the representation himself,” (6) “whether an attorney might have initially acted pro bono,” (7) and “other returns (such as reputation, etc.) that an attorney might expect from the representation.” Id. at 184. Additionally, the requested attorney's fees must be “in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). The Second Circuit's “forum rule generally requires use of the hourly rates employed in the district in which the reviewing court sits in calculating the presumptively reasonable fee.” Graziano, 2024 WL 1175143, at *2 (quotation marks omitted) (quoting Bergerson, 652 F.3d at 290).
Plaintiffs' attorneys charged the following rates per hour: Brian King (“King”), lead counsel, $600; Robert Liebross (“Liebross”), local counsel, $600; Samuel Hall (“Hall”), associate, $325; Tara Peterson (“Peterson”), associate, $325. (See Dkt. No. 100 ¶¶ 15-16, 20-22.) In support of these rates, Plaintiffs submitted several declarations outlining their attorneys' legal experience, particularly in ERISA matters. (See Dkt. Nos. 100, 101, 102, 103.) King has practiced law for thirty-eight years, twenty- nine of which have “been almost exclusively devoted to” ERISA actions. (Dkt. No. 100 ¶ 3.) Liebross has worked “almost exclusively . . . with claims arising under the ERISA law” since 1984. (Dkt. No. 103 ¶ 3.) Hall has practiced law since 2016, with his current practice consisting predominantly of ERISA actions. (See Dkt. No. 101 ¶¶ 2, 5) . Peterson has practiced law since 2001 and focused predominantly on ERISA claims since 2021. (See Dkt. No. 102 ¶¶ 2, 4, 7.) Plaintiffs further attest that the rates charged were reasonable based on the specialized knowledge required to litigate ERISA matters and based on rates charged by attorneys for similar work. (See Dkt. No. 100 ¶ 18.) Defendants do not dispute the reasonableness of these rates. (See Dkt. No. 104.)
The Court finds that the rates Plaintiffs requested are reasonable based on the experience of Plaintiffs' attorneys with ERISA matters and because they are in line with the prevailing rates in the community. See Graziano, 2024 WL 1175143, at *3 (approving hourly rates of $788 for founding partner, $608 for partner and lead counsel, and $540 and $432 for associates in ERISA action); Dimopoulou v. First Unum Life Ins. Co., No. 13 Civ. 7159, 2017 WL 464430, at *3 (S.D.N.Y. Feb. 3, 2017) (approving hourly rates of $660 for lead counsel, $570 for senior associate, and $300 for associate in ERISA action); Demonchaux v. Unitedhealthcare Oxford, No. 10 Civ. 4491, 2014 WL 1273772, at *7 (S.D.N.Y. Mar. 27, 2014) (approving hourly rates of $600 for partner, $500 for senior associate, and $300 for associate in ERISA action).
2. Reasonable Number of Hours Expended
“In order to calculate the reasonable hours expended, the prevailing party's fee application must be supported by contemporaneous time records, affidavits, and other materials.” Graziano, 2024 WL 1175143, at *4 (quoting McDonald ex rel. Prendergast v. Pension Plan of the NYSA-ILA Pension Tr. Fund, 450 F.3d 91, 96 (2d Cir. 2006)). The Court has wide latitude to determine whether the number of hours expended was reasonable and “may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties.” Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) (quoting DiFilippo v. Morizio, 759 F.2d 231, 236 (2d Cir. 1985)). “The district court is not obligated to undertake a line-by-line review of [Plaintiffs'] fee application,” and may, “instead, exercise its discretion and use a percentage deduction as a practical means of trimming fat.” Marion S. Mishkin Law Office v. Lopalo, 767 F.3d 144, 150 (2d Cir. 2014) (quotation marks omitted) (quoting McDonald, 450 F.3d at 96).
i. Hours Expended and United's Objections
In the present matter, King worked 66.8 hours, Liebross worked 4.6 hours, Hall worked 0.7 hours, and Peterson worked 15.5 hours. (See Dkt. No. 99, at 9.) Plaintiffs submitted contemporaneous time records in support of their Motion for Attorney's fees. (See Dkt. Nos. 100, 101, 102, 103.) Defendants say these amounts of time are unreasonable for several reasons. (See Dkt. No. 104.)
First, Defendants point out that Plaintiffs did not prevail on their Parity Act claim and accordingly request a 50% reduction in an award of attorney's fees. Defendants acknowledge that “reductions in attorney's fees based on partial success [are allowed, so] long as the reduction is not mathematically based solely on the number of claims won or lost.” (Id. at 4 (quoting Scarangella v. Grp. Health, Inc., 731 F.3d 146, 156 n.14 (2d Cir. 2013)).) Nonetheless, Defendants assert that a 50% reduction is justified because “Plaintiffs' summary judgment briefing demonstrates they spent nearly half of the case litigating their [Parity Act] claim,” (id. at 5), and because the claim is not “legally and factually intertwined” with Plaintiffs' ERISA claim. (Id. at 4-5 (quoting Baim v. Notto, 316 F.Supp.2d 113, 121 (N.D.N.Y. 2003)).)
Next, Defendants object to specific time entries. Defendants assert that King's 8.1 hours drafting and revising the complaint were excessive for two reasons: A large portion of the fact-specific allegations is repetitive of prelitigation letters Plaintiffs sent to Defendants, and the rest of the Complaint is “nearly identical” to other complaints King filed in unrelated cases. (Id. at 6.) Accordingly, they request King's time drafting the complaint be reduced by half. Defendants go on to note that the records filed in support of Peterson's time seem to be related to another matter, and all of Peterson's 15.5 hours should be cut. Defendants also request that all of Hall's involvement with the matter, 0.7 hours, be cut, as he was only “tangentially involved in this case.” (Id. at 7 (quoting Jarosz v. Am. Axle & Mfg., Inc., No. 12 Civ. 39S, 2019 WL 6723741, at *8 (W.D.N.Y. Dec. 11, 2019)).) Lastly, Defendants contend that 7.8 hours of King's time should be cut, as this time was spent in response to United's request to change venue, a result dictated by contract. (See id. at 8.)
In total, Defendants argue that Plaintiffs should be awarded $17,865 in attorney's fees. This amount reflects a $12,375 reduction for purportedly unreasonable time entries and an additional 50% reduction based on Plaintiffs' failure on their Parity Act claim. (See id. at 11.)
ii. Reasonableness of Hours Expended
In Scarangella, the Second Circuit noted that an award of attorney's fees may be reduced based on a party's partial success. 731 F.3d at 156 n.14. District courts in this Circuit have come to differing conclusions on this issue. See Jarosz, 2019 WL 6723741, at *9 (declining to reduce award of attorney's fees in ERISA action based on unsuccessful claims because they “involved a common core of facts and related legal theories”); cf. Levy v. Young Adult Inst., Inc., No. 13 Civ. 2861, 2019 WL 1434271, at *6 (S.D.N.Y. Mar. 30, 2019) (reducing attorney's fee award in ERISA action by 35% because plaintiffs prevailed only on one fourth of their claims, their monetary recovery fell “substantially short of their requested damages,” and they requested fees for litigating unsuccessful claims pursued at trial nearly a year after receiving favorable summary judgment on another issue); see also L.I. Head Start Child Dev. Servs., Inc. v. Econ. Opportunity Comm'n of Nassau Cnty., Inc., 865 F.Supp.2d 284, 296-97 (E.D.N.Y. 2012) (collecting cases).
In awarding attorney's fees, “the most critical factor is the degree of success obtained.” Kassim v. City of Schenectady, 415 F.3d 246, 253 (2d Cir. 2005) (quoting Hensley v. Eckerhart, 461 U.S. 424, 436 (1983)). “In the more unitary cases - those involving a common core of facts or related legal theories - it is more difficult to divide the hours expended on a claim-by-claim basis.” Id. (quotation marks and citation omitted). Yet, “[w]here a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee,” and “the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit.” Hensley, 461 U.S. at 435.
The Court is unpersuaded by Defendants' argument for a reduction based on partial success. Plaintiffs' time records do not demonstrate that they spent “nearly half of the case” on the Parity Act claim, and Defendants make no reference to any specific time entries to substantiate this assertion. (See Dkt. No. 104 at 5.) Moreover, Baim, the case Defendants cite is support of this 50% reduction, is inapposite because it dealt with attorney's fees under 42 U.S.C. § 1988, which employs a different standard than ERISA's attorney's fees provision. 316 F.Supp.2d at 121; compare 42 U.S.C. § 1988(b) (“[T]he court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee.” (emphasis added)), with 29 U.S.C. § 1132(g)(1) (“[T]he court in its discretion may allow a reasonable attorney's fee and costs of action to either party.” (emphasis added)), and Hardt, 560 U.S. at 252 (“[A] fee claimant need not be a ‘prevailing party' to be eligible for an attorney's fees award under § 1132(g)(1).”).
The Court is mindful that “ERISA's attorney's fee provisions must be liberally construed to protect the statutory purpose of vindicating employee benefits rights.” Scarangella, 731 F.3d at 155 (quotation marks omitted) (quoting Slupinski v. First Unum Life Ins. Co., 554 F.3d 38, 47 (2d Cir. 2009)). Plaintiffs succeeded on the merits of their ERISA claim and were granted the relief they sought. Because the ERISA claim and Parity Act claim were factually and legally related, and because “ERISA's attorney's fees provisions must be liberally construed,” id., the Court declines to reduce Plaintiffs' award of attorney's fees based on partial success.
As to King's time spent drafting the complaint, the Court finds that this time was reasonably spent given L.V.'s complex medical history, the time it took to review that history, and the time it took to prepare the complaint. The Court also declines to cut Peterson's time, as her declaration states that she “worked 15.5 hours on this matter,” (Dkt. No. 102 ¶ 9), and Plaintiffs' explanation that Peterson's time entries incorrectly captioned her time is plausible. (See Dkt. No. 105, at 7.) Moreover, Hall's time on this case is not unreasonable simply because his involvement was minor. Lastly, King's time relating to United's request to change venue is not rendered unreasonable based on the existence of a forum selection clause. Much of this time was not spent opposing the transfer of venue, but rather researching the enforceability of the clause and coordinating with opposing counsel to effectuate the transfer.
Although the number of hours spent by Plaintiffs' counsel in this matter was reasonable, “a failure to delegate work to junior, less expensive attorneys may be grounds for reducing an award of attorney's fees.” Dimopoulou, 2017 WL 464430, at *3 (quoting Winkler v. Metro. Life Ins. Co., No. 03 Civ. 9656, 2006 WL 2347826, at *2 (S.D.N.Y. Aug. 10, 2006)). Here, Peterson, the associate most involved with this case, billed for 15.5 hours of work while King billed for 66.8, including for tasks like legal research and preparing initial drafts of case documents that, in the Court's experience, are suitable tasks for lawyers more junior to King. (See Dkt. No. 100.) The Court will reduce Plaintiffs' award of attorney's fees by ten percent, $4,810.50, to account for this lack of delegation. See Winkler, 2006 WL 2347826, at *2 (reducing attorney's fees award by twenty percent because of excessive billing and because partner failed to delegate work to associates); Maddaloni v. Pension Tr. Fund of Pension, Hospitalization & Benefit Plan of Elec. Indus., No. 19 Civ. 3146, 2023 WL 7000885, at *5 (E.D.N.Y. Sept. 1, 2023) (reducing attorney's fees award by thirty-three percent for excessive hours and failure to delegate where partners billed 379.7 hours and associates billed only 8.5 hours); Bridgeport & Port Jefferson Steamboat Co. v. Bridgeport Port Auth., No. 03 Civ. 599, 2011 WL 721582, at *8, 11 (D. Conn. Feb. 22, 2011) (reducing attorney's fees award by twenty-five percent because plaintiffs were awarded a small fraction of the monetary relief sought and because “more [than] half of all the hours billed . . . were billed by [lead counsel]”). In making this determination, the Court is mindful that “trial courts need not, and indeed should not, become green-eyeshade accountants.” Fox v. Vice, 563 U.S. 826, 838 (2011). Rather, “[t]he essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection.” Id.
In sum, the Court reduces Plaintiffs' requested fees by $4,810.50 and awards a total of $43,294.50 in attorney's fees.
C. COSTS
“The Court may order payment of litigation costs, in addition to attorneys' fees.” Graziano, 2024 WL 1175143, at *5 (citing 29 U.S.C. § 1132(g)(1)). Plaintiffs request reimbursement in the amount of $400 for the Complaint's filing fee in this case. Defendant does not object to this request. Thus, the Court grants the request for payment of costs of $400.
D. PREJUDGMENT INTEREST
Citing to 28 U.S.C. § 1961, Plaintiffs seek prejudgment interest at a rate of 8.5 percent, the current federal prime rate. Defendants contend that this would overcompensate Plaintiffs, and propose an alternative rolling interest rate based on the average one-year treasury rates. The Court has “broad discretion to decide whether to award prejudgment interest in this case.” Frommert v. Conkright, 913 F.3d 101, 109 (2d Cir. 2019) (citation omitted). “In exercising such discretion, the District Court [must] consider (i) the need to fully compensate the wronged party for actual damages suffered, (ii) . . . fairness and the relative equities of the award, (iii) the remedial purpose of the statute involved, and/or (iv) such other general principles as are deemed relevant by the court.” Id. (quotation marks omitted) (quoting Jones v. UNUM Life Ins. Co., 223 F.3d 130, 139 (2d Cir. 2000)). “Those same factors also inform a district court's choice of a particular interest rate.” Id.
Here, the rate requested is reasonable in light of the factors above. This rate “strikes an appropriate balance” and “fairly compensate[s]” Plaintiffs without penalizing Defendants. Id. at 110 (awarding federal prime rate as prejudgment interest rate in ERISA action); see Spears v. Liberty Life Assurance Co., No. 11 Civ. 1807, 2020 WL 2404973, at *6 (D. Conn. May 12, 2020) (collecting ERISA cases awarding prejudgment interest at the federal prime rate); Chung v. Provident Life & Cas. Ins. Co., No. 21 Civ. 9344, 2024 WL 78366, at *1 (S.D.N.Y. Jan. 4, 2024) (awarding rate of nine percent prejudgment interest in ERISA action). The Court grants Plaintiffs' request for prejudgment interest at a rate of 8.5 percent.
III. ORDER
For the reasons stated above, the Court GRANTS the Motion of plaintiffs E.V. and L.V. for Attorney's Fees and Costs in the amount of $43,694.50 and awards a prejudgment interest rate of 8.5 percent.
The Clerk of Court is respectfully directed to terminate all outstanding motions in this case, close this case, and enter judgment as set forth above.
SO ORDERED.