Opinion
No. 03-4964 MMC, (Docket No. 35).
November 5, 2004
ORDER GRANTING PLAINTIFF'S MOTION FOR AWARD OF ATTORNEY'S FEES; VACATING HEARING
Before the Court is plaintiff Linda Ludlow's motion for an award of attorney's fees, pursuant to 29 U.S.C. § 1132(g). Defendants ADVO-Systems, Inc. Disability Income Plan and Paul Revere Life Insurance Company have filed opposition, to which plaintiff has replied. Having considered the papers submitted in support of and opposition to the motion, the Court deems the matter appropriate for decision on said submissions, VACATES the hearing scheduled for November 5, 2004, and rules as follows.
BACKGROUND
In the instant action, plaintiff sought to recover disability benefits under the terms of an employee benefit plan. After the Court, in denying defendants' motion for summary judgment and granting plaintiff's cross-motion for summary adjudication, found that plaintiff had not failed to timely exhaust plan remedies, the parties settled plaintiff's claim for benefits. Specifically, defendants agreed to pay plaintiff "all disability benefits claimed in [her] complaint" and to "prospectively pay to [plaintiff] all benefits which may accrue to her under the terms of the employee benefit plan in question." (See Johnston Decl. ¶ 2.) The parties, however, did not reach a settlement as to plaintiff's claim for attorney's fees. (See id.)
DISCUSSION
In an ERISA action, the "court in its discretion may allow a reasonable attorney's fee and costs of action to either party."See 29 U.S.C. § 1132(g)(1). When exercising such discretion, a district court "should consider these factors among others: (1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against the opposing parties would deter others from acting under similar circumstances; (4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties' positions." See Hummell v. S.E. Rykoff Co., 634 F. 2d 446, 453 (9th Cir. 1980). In applying the Hummell factors, a district court must "have the remedial purposes of ERISA in mind." See Smith v. CMTA-IAM Pension Trust, 746 F. 2d 587, 589 (9th Cir. 1984).
A. Entitlement to Fees
Having considered the Hummell factors, the parties' respective submissions, and the Clerk's file in this matter, the Court, for the reasons set forth below, finds that plaintiff is entitled to an award of reasonable attorney's fees.
1. Defendant's Culpability
Plaintiff argues that defendants acted culpably in denying plaintiff's administrative appeal on the asserted ground that plaintiff failed to meet a 60-day filing deadline, because defendants, according to plaintiff, knew the purported deadline was not set forth in any plan document. As discussed in the Court's order of August 18, 2004, the provision on which defendants relied was included in a summary plan description ("SPD") but not the plan itself. Although the Court agreed with plaintiff that the SPD's 60-day deadline provision was not a plan term, plaintiff offers no evidence suggesting that defendants knew that this legal conclusion was likely, such that an inference of culpability or bad faith could be drawn.
To the extent defendants now argue that the Court's finding in this regard was erroneous on the ground the SPD itself is the plan or a plan document, any such argument is untimely and, in any event, meritless, in that the SPD, by its own terms, is not one of the "official plan documents," (see Lenser Decl., filed July 16, 2004, Ex. 1 at 97), but, rather, is "for informational purposes only," (see id. at 3.)
Accordingly, this factor does not weigh in favor of an award of fees.
2. Defendant's Ability to Satisfy Award
Plaintiff argues, and defendants do not dispute, that defendants have the ability to satisfy the award sought by plaintiff, which is $26,580.00.
Accordingly, this factor weighs in favor of an award of fees.
3. Deterrence to Others
Defendants argue that because they did not act culpably in invoking the 60-day deadline in the SPD, and because defendants are no longer issuing the underlying policy, it is unnecessary to award fees to serve as a deterrent to defendants. The thirdHummell factor, however, pertains to whether an award of fees will deter "others from acting under similar circumstances."See Hummell, 634 F. 2d at 453. The Court agrees with plaintiff that an award of fees could deter other plan administrators from requiring participants to comply with provisions in SPDs where, as here, the SPD is not a valid plan amendment. Cf. Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F. 3d 1154, 1161-62 (9th Cir. 2001) (holding provision in SPD not part of plan where plan administrator, in issuing SPD, did not follow amendment procedure set forth in plan).
Accordingly, this factor weighs in favor of an award of fees.
4. Benefit to All Plan Participants
Plaintiff acknowledges that the settlement, under which she has obtained benefits, primarily benefits plaintiff. Plaintiff argues, however, that the Court's finding as to the 60-day provision benefits all plan participants. Defendants, in opposition, assert that only a "small number of claimants" are subject to adverse claim determinations and an "overwhelming percentage" of that "small number" file appeals in a "timely manner." (See Defs.' Opp. to Pl.'s Mot. for Atty. Fees at 8.) Defendants offer no evidence to support these contentions. Defendants, however, are correct that because the parties settled plaintiff's claim for benefits, the Court's specific decision as to the 60-day deadline has no preclusive effect. See Littlejohn v. United States, 321 F. 3d 915, 923 (9th Cir.) (holding party seeking to invoke issue preclusion must show determination of issue was "critical and necessary part of thejudgment in the earlier action") (emphasis added), cert. denied, 124 S. Ct. 486 (2003). Nevertheless, all plan participants may benefit from the decision in that defendants have been put on notice that, if they seek to amend a plan with an SPD, they must follow the procedure set forth in that plan.
Accordingly, this factor weighs in favor of an award of fees, albeit not heavily so.
5. Relative Merits of Parties' Positions
As noted, plaintiff has prevailed by way of settlement on her claim for benefits. Defendants argue that, irrespective of the settlement, defendants' position on the merits was well-founded.
The relative merits of the parties' position may be measured by the "result obtained by the plaintiff." See Smith, 746 F. 2d at 590. If the plaintiff "receives what he or she sued for by way of voluntary settlement," even if the plaintiff does not receive all relief sought in the complaint, the fifth Hummell factor weighs in favor of an award of fees. See id. (holding where plaintiff obtained "portion of what he brought suit to recover" by way of voluntary settlement, fifth Hummell factor weighed in favor of award of benefits).
Here, plaintiff prevailed on her claim for benefits by way of a voluntary settlement. Accordingly, this factor weighs in favor of an award of fees.
B. Calculation of Award
Plaintiff requests an award in the amount of $26,580.00, consisting of 88.6 hours of attorney time multiplied by an hourly rate of $300.00.
With respect to the amount of time expended, counsel for plaintiff has offered a declaration setting forth eight categories of work and, as to each category, setting forth the amount of time expended and describing the nature of the tasks performed. (See Johnston Decl., filed October 6, 2004, ¶ 3.) Although defendants argue, in conclusory fashion, that the details offered by plaintiff are not sufficient to enable the Court to evaluate the propriety of the work, the Court disagrees. Having reviewed the declaration of plaintiff's counsel, the Court finds the time expended to be reasonable.
With respect to the hourly rate, counsel for plaintiff states that he has been in practice since December 1986, has practiced primarily in the fields of insurance and employee benefits since that date, and that a significant part of his practice is dedicated to ERISA law, both at the trial and appellate level. (See id. ¶ 4.) In support of plaintiff's argument that a rate of $300 for her counsel is reasonable, plaintiff offers the declaration of Daniel Feinberg ("Feinberg"), an attorney who has been in practice since 1988, whose practice has "focused on" employee benefits law since that date, and who states that his hourly rate is $450.00 per hour and that such rate is "similar to the rates charged by other ERISA litigation attorneys in the San Francisco Bay Area with similar experience." (See Feinberg Decl. ¶ 7). Defendants, in opposition, argue that because Feinberg, in his declaration, states that he has served as class counsel in "numerous class actions," (see id. ¶ 5), his hourly rate does not support plaintiff's request for a rate of $300.00. The Court disagrees. First, to the extent Feinberg's experience in class actions arguably might entitle him to a higher hourly rate in actions not involving a class, plaintiff does not seek the identical rate claimed by Feinberg, but rather a rate 33% lower. Second, Feinberg and plaintiff's counsel have practiced for a similar amount of time in the same field in the same geographic area and, accordingly, Feinberg's declaration is "satisfactory evidence of the prevailing market rate." See United Steelworkers v. Phelps Dodge Corp., 896 F. 2d 403, 407 (9th Cir. 1990) (holding, in action under 42 U.S.C. § 1983, declarations offered by "other attorneys regarding prevailing fees in the community" are "satisfactory evidence" of prevailing market rate). Third, other district courts in California have recently awarded in ERISA actions hourly rates commensurate with the rate claimed by plaintiff's counsel. See id. (holding "rate determinations in other cases" are "satisfactory evidence" of prevailing market rate); see, e.g., Mogck v. UNUM Life Ins. Co., 289 F. Supp. 1181, 1190-91 (S.D. Cal. 2003) (finding rates of $350.00 and $325.00 per hour "within the realm of reasonableness"); Lessard v. Applied Risk Management, Inc., 2001 WL 34033100 (N.D. Cal. 2001) (finding rate of $305 per hour "in line with the hourly rates of similarly skilled litigators").
CONCLUSION
For the reasons set forth above, plaintiff's motion for an award of attorney's fees is hereby GRANTED, and plaintiff is awarded the sum of $26,580.00.
This order terminates Docket No. 35.
IT IS SO ORDERED.