Mindt v. Prudential Insurance Company of America

Full title: HERBERT MINDT, Plaintiff, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA and…

Court: United States District Court, D. Oregon

Date published: Aug 23, 2004

CV-03-761-ST (D. Or. Aug. 23, 2004)

Opinion

CV-03-761-ST.

August 23, 2004

OPINION AND ORDER

JANICE STEWART, Magistrate Judge

This is an action under the Employee Retirement Income Security Act ("ERISA"), 29 USC § 1132(a)(1)(B), to recover long-term disability benefits. On June 29, 2004, this court entered a judgment in plaintiff's favor. As the prevailing party, plaintiff now moves under 29 USC § 1132(c), FRCP 54(d) and LR 54.4 for an award of attorney fees in the sum of $20,055.00 and costs in the sum of $454.15. For the reasons set forth below, plaintiff is awarded attorney fees in the sum of $12,916.00 and costs in the sum of $241.58.

DISCUSSION

I. Attorney Fees A. Failure to Confer

Defendants first object to any award of fees and costs because plaintiff failed to comply with LR 7.1(a) by filing this motion without first making "a good faith effort through personal or telephone conferences to resolve the dispute." Prior to filing the motion, plaintiff contacted defendants' counsel only to request an extension of time to file the motion and not to confer concerning the substance of the motion. Such contact fails to comply with LR 7.1(a).

Ordinarily this failure would result in this court denying plaintiff's motion, but granting leave to refile after complying with LR 7.1(a). However, defendants' counsel has already initiated settlement discussions which are on-going. Therefore, plaintiff is now trying to resolve the dispute, albeit due to defendants' diligence. Under these circumstances, this court will not require a futile act and will proceed to the merits of the motion.

B. Entitlement to an Award of Fees

In ERISA cases, "the court in its discretion may allow reasonable attorney's fees and costs of action to either party." 29 USC § 1132(g)(1). However, the court should broadly interpret that statute:

to mean that a plan participant or beneficiary, if he prevails in his suit under § 1132 to enforce his rights under his plan, should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust. As in cases involving section 1988 awards, a district court considering a motion for attorney's fees under ERISA should apply discretion consistent with the purposes of ERISA, those purposes being to protect employee rights and to secure effective access to federal courts. As a general rule, ERISA employee plaintiffs should be entitled to a reasonable attorney's fee if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.

Nelson v. EGG Energy Measurements Group, Inc., 37 F3d 1384, 1382 (9^th Cir 1994).

Defendants object in part to awarding attorney fees to plaintiff based on the five factor inquiry set forth in Hummell v. S.E. Rykoff Co., 634 F2d 446, 453 (9^th Cir 1980). However, where it is evident from the judgment of the court that plaintiff prevailed, it is unnecessary for the court to engage in a discussion of the factors enumerated in Hummel. Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F3d 1154, 1164 (9^th Cir 2001); Nelson, 37 F3d at 1392.

Plaintiff prevailed on all issues that were raised and briefed by the parties, including the right to compel an independent medical examination, the standard of review, and the wrongful termination of benefits. Defendants argue that plaintiff did not prevail on his argument that defendants inserted a new term into the Plan by requiring objective evidence of plaintiff's disability. This court did reject this argument in part by concluding that defendants could require objective evidence. However, plaintiff prevailed on the main argument that defendants already had such objective evidence and should require nothing more.

Given the absence of any circumstances mitigating against an award of attorney fees to plaintiff, this court finds that plaintiff is entitled to recover his reasonable attorney fees.

C. Amount of Fees

The amount of reasonable attorney fees recoverable under 29 USC § 1132(g)(1) are calculated using a hybrid lodestar/multiplier approach. D'Emanuele v. Montgomery Ward Co., Inc., 904 F2d 1379, 1382-83 (9^th Cir 1990). The lodestar is determined by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. Hensley v. Eckerhart, 461 US 424, 433 (1983). In calculating the lodestar, the court must consider those factors identified in Kerr v. Screen Extras Guild, Inc., 526 F2d 67 (9^th Cir 1975), cert denied, 425 US 951 (1976) which have now been subsumed within the initial calculation. Cunningham v. County of Los Angeles, 879 F2d 481, 487 (9^th Cir 1988), cert denied, 425 US 951 (1990). Subsumed factors include: (1) novelty and complexity of the issues; (2) special skill and experience of counsel; (3) quality of the representation; (4) the results obtained; and (5) the superior performance of counsel.¹ After calculating the lodestar, the fee may be adjusted by any nonsubsumed factors identified in Kerr.

1 The Ninth Circuit has explained that a "rote recitation of the relevant factors is unnecessary" so long as the district court adequately explains the basis for the award. O'Neal v. City of Seattle, 66 F3d 1064, 1069, n 5 (9^th Cir 1995).

Defendants do not dispute that the number of hours expended by plaintiff's attorney (64.9) and her law clerks (4.5) is reasonable. However, they object to the $300.00 hourly rate requested by plaintiff's attorney.

In determining what constitutes a reasonable fee, this court must look to the "prevailing market rates in the relevant community." Blum v. Stenson, 465 US 886, 895 n 11 (1984). The relevant community "is one in which the district court sits." Davis v. Mason County, 927 F2d 1473, 1488 (9^th Cir), cert denied, 502 US 899 (1991). The relevant community in this case is Portland, Oregon. The rates are determined by what a lawyer of comparable skill, experience, and reputation could command in the relevant community. Blum, 465 US at 895 n 11. In order to meet this burden of proof, the fee applicant must "produce satisfactory evidence — in addition to the attorney's own affidavits" that the requested rates are prevailing market rates under this standard. Id.

In support of her request for $300.00 per hour, plaintiff's attorney has not submitted any supporting affidavit from a lawyer who practices in Oregon, other than her own. Instead, she has submitted declarations from two lawyers, Ronald Dean and Stephen Krafchick, who work in Seattle and Los Angeles and are not licensed to practice law in Oregon. Plaintiff contends that it is appropriate for this court to consider the declarations of lawyers from other jurisdictions "because ERISA cases involve a national standard, and attorneys practicing ERISA law in the Ninth Circuit tend to practice in different districts." Mogck v. Union Life Ins. Co. of Am., 289 FSupp2d 1181, 1190-91 (SD Cal 2003). She also argues that prevailing rates for ERISA attorneys in Portland, Oregon, are difficult to establish due to the small number of counsel handling these cases.

However, in a recent ERISA case, this court concluded that an hourly fee of $175.00 was appropriate for an ERISA plaintiff's lawyer based in Portland, Oregon, who has been in practice since 1992. Thompson v. Standard Ins. Co., 167 FSupp2d 1195, 1198-99 (D Or 2001). In that case, Ms. Glor, who is plaintiff's counsel in this case, submitted an affidavit in support of the $175.00 hourly rate for representing plaintiffs in ERISA cases. As noted in that case, other lawyers in Oregon practice ERISA law.

"To determine whether a requested hourly rate is reasonable, this Court uses the Oregon State Bar Economic Survey (Economic Survey) as an initial benchmark. . . . [C]ounsel are encouraged to provide ample justification for deviating from the rates in the Economic Survey." Roberts v. Interstate Distributor Co., 242 FSupp2d 850, 857 (D Or 2002). Ms. Glor has been practicing since 1990. According to the 2002 OSB Economic Survey, the median rate for Portland lawyers who have been in practice for 13-15 years is $180.00 per hour. The average rate for such lawyers is $189.00 per hour. Using a 6.1% adjustment for inflation since 2001² yields a current rate of $190.00-$200.00 per hour.

2 This is based on the average consumer price index. See http://stats.bls.gov/cpi.

In another ERISA benefits case filed in this court, DeLeon v. Bristol-Meyers Squibb Co., Case No. CV-01-350-AS, Ms. Glor represented the plaintiff. In her February 8, 2002 affidavit filed in support of her motion for attorney fees, Ms. Glor stated that her customary hourly rate was $175.00, but in "high risk" cases, where the standard of review is likely to be an "abuse of discretion," her customary charge is $250.00 per hour. The present case was not a "high risk" case because defendants conceded that the standard of review was de novo, not abuse of discretion.

Now in 2004, Ms. Glor is seeking a rate of $300.00 per hour in what, according to her own definition, is not a "high risk" case. An increase from $175.00 to $300.00 would represent a 58% increase in her hourly rate from 2002 to 2004. That is not a reasonable increase. In 2002, Ms. Glor's hourly rate for the present case would have been $175.00. Using a 6.1% increase for inflation yields a current rate of $186.00 per hour. However, $186.00 per hour is slightly lower than could be justified by the 2002 OSB Economic Survey adjusted by inflation. Therefore, considering all relevant factors, this court deems a reasonable hourly rate in this case for Ms. Glor to be $190.00.

The second step in the fee calculation process is to determine if the lodestar amount should be adjusted upward or downward based on any of the Kerr factors. An adjustment is justified only in "rare" and "exceptional" cases. Van Gerwen v. Guarantee Mut. Life Co., 214 F3d 1044, 1045 (9^th Cir 2000. Here, none of the Kerr factors warrant an adjustment.

This case only required 64.9 hours of plaintiff's counsel's time which is modest compared to other ERISA cases. For example, the DeLeon case required 95 hours of plaintiff's attorneys' time. Nor did this case involve any novel or difficult questions. Most ERISA cases involve the difficult issue of determining the appropriate standard of review. Here, however, defendants conceded that it was de novo. As far as ERISA cases go, this was not a very complex case. Even though ERISA is a speciality area, that factor alone does not justify a higher rate than other equally qualified lawyers in Portland charge or what plaintiff's counsel normally charges for ERISA cases.

In short, none of the Kerr factors warrant an upward adjustment of the reasonable fee in this case based on $186.00 per hour. As a result, plaintiff's attorney fee award is reduced to 64.9 hours times $190.00 per hour for Ms. Glor ($12,331.00) plus 4.5 hours times $130.00 per hour for the law clerks ($585.00), for a total of $12,916.00. This fee is reasonable in relation to the success achieved.

II. Costs

Pursuant to FRCP 54(d), "costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs." Although this rule creates a presumption in favor of awarding costs to a prevailing party, the court retains the discretion to allow or disallow costs to a prevailing party. Association of Mexican-American Educators v. State of Calif., 231 F3d 572, 593 (9^th Cir 2000). The expenses which may be taxed as costs against the losing party are enumerated in 28 USC § 1920. The court may not tax costs beyond those authorized by § 1920. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 US 437, 441-42 (1987).

Defendants first object to the sum of $151.87 for photocopying costs. Under 28 USC § 1920(4), costs may be recovered for "copies of papers necessarily obtained for use in the case." Copying costs for documents produced in discovery, submitted to the court for consideration of motions, and used as exhibits at trial are recoverable. See Lee v. Walters, 2002 WL 31972186, *1 (D Or, Dec 23, 2002), citing Fressell v. ATT Technologies, Inc., 103 FRD 111, 115-116 (ND Ga 1984); Erving Paper Mills v. Hudson-Sharp Mach. Co., 271 F Supp 1017, 1023 (ED Wis 1967). However, recoverable copying costs do not include extra copies of filed papers, correspondence, and copies of cases since these are prepared for the convenience of the attorneys. Lee, 2002 WL 31972186, at *1.

Neither defendants nor this court can ascertain from plaintiffs' Bill of Costs what photocopying costs were incurred for copies necessarily obtained for use in the case, as opposed to copies for the convenience of counsel. Therefore, the request of $151.87 for photocopying costs is denied, but with leave to refile with appropriate supporting documentation.

Defendant also objects to $60.50 for "Velo Messenger" charges. Messenger service charges are not recoverable under 28 USC § 1920. See Frederick v. City of Portland, 162 FRD 139, 146 (D Or 1995). Therefore, this cost is denied.

Accordingly, plaintiff's requested costs of $454.15 are reduced by the sum of $212.57 to $241.58.

ORDER

Plaintiff's Motion for Attorney Fees and Costs (docket # 40) is GRANTED in the sum of $12,916.00 for attorney fees and $241.58 for costs. However, leave is granted to refile within 10 days a request for copying costs with supporting documentation.