Barnes v. At & T Pension Benefit Plan-Nonbargained Program

963 F.Supp.2d 950

Quiller Barnes, Plaintiff,

v.AT & T Pension Benefit Plan–Nonbargained Program, Defendant.

No. C–08–4058 EMC

United States District Court, N.D. California.

July 26, 2013

Order After Supplemental Briefing October 10, 2013

Michelle Lee Roberts, Cassie Springer, Springer & Roberts LLP, 410 – 12th Street, Suite 325, Oakland, CA 94607, R. Joseph Barton, Bruce Frank Rinaldi, Cohen Milstein Sellers & Toll PLLC, Washington, DC, for Plaintiff.

M'Alyssa Christianne Mecenas, Stephen Henry Harris, Paul Hastings LLP, 515 S. Flower Street, 25th Floor, Los Angeles, CA 90071, Patrick W. Shea, Paul Hastings LLP, 75 E. 55th Street, First Floor, New York, NY 10022, Regan A.W. Herald, Paul Hastings LLP, 55 2nd Street, San Francisco, CA 94105, for Defendant.

ORDER GRANTING PLAINTIFF'S MOTION FOR ATTORNEY'S FEES

(Docket No. 355)

EDWARD M. CHEN, United States District Judge

Plaintiff Quiller Barnes initiated this action on behalf of himself and a class, asserting that Defendant AT & T Pension Benefit Plan — Nonbargained Program owed them additional benefits. Mr. Barnes asserted five claims for relief. On May 10, 2012, the Court addressed the parties' cross-motions for summary judgment on three of the claims. The Court granted Mr. Barnes summary judgment on Count I of the complaint but granted the Defendant Plan summary judgment on Counts II and V. Subsequently, the parties stipulated to dismissal of Counts III and IV. See Docket No. 309 (Order at 31). Mr. Barnes has appealed, inter alia, this Court's summary judgment order to the Ninth Circuit. See Docket No. 371 (notice of appeal). In the meantime, currently pending before the Court is Mr. Barnes's motion for attorney's fees and nontaxable costs. Mr. Barnes is asking for more than $1.3 million in fees and $75,000 in costs. See Mot. at 2; see also Roberts Reply Decl. ¶ 3.

Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel and all other evidence of record, the Court hereby GRANTS Mr. Barnes's motion but orders the parties to provide supplemental briefing so that the Court may determine what the exact amount of fees and costs awarded should be.

I. FACTUAL & PROCEDURAL BACKGROUND

Because the parties stipulated to dismissal of Counts III and IV, and because the viability of Count V is dependent on the viability of Count II, the critical claims in the instant case are Counts I and II. As noted above, the Court granted summary judgment to Mr. Barnes on Count I but granted the Defendant Plan summary judgment on Count II.

A. Count I—Failure to Provide Adequate Notice

In Count I (an individual claim only), Mr. Barnes argued that the Defendant Plan had violated ERISA by failing to give him adequate notice of the specific reasons for the denial of his claim. The Court held that there was a violation of ERISA's notice requirements because, even though the Defendant Plan had given reasons for the denial, it did not cite the specific plan provision on which it had relied (§ 3.4(a)), nor had it quoted the language of the provision or given a close paraphrase; this affected the ability of Mr. Barnes to adequately appeal. See Docket No. 309 (Order at 8–9).

Ultimately, however, the Court declined to order any remedy because the normal remedy would be to remand to the plan administrator and, here, a remand would be “essentially pointless because it is now clear—if only through this litigation—that § 3.4(a) is the provision upon which the Defendant Plan relied.” Docket No. 309 (Order at 9). Based on the record, it appears that Mr. Barnes had notice that the Defendant Plan was relying on § 3.4(a) at least as of February 5, 2010, when the Defendant Plan filed a motion for summary judgment and highlighted that provision in support of its position. See Docket No. 47 (Def.'s Mot. for Summ. Judg. at 4, 14) (highlighting § 3.4(a) and arguing that “[t]he plain language of the plan provisions in Section 3.4(a) ... expressly prohibit a pension calculation for a rehired employee that ignores a prior cashout by the employee”). It is plausible, however, that Mr. Barnes knew of § 3.4(a) slightly earlier, as, on January 26, 2010, he filed a motion for leave to amend his complaint, and the proposed amended complaint clearly relied on § 3.4(d)(3) of the plan. See Docket No. 39–1 (Prop. Am. Compl. ¶ 50). If Mr. Barnes was relying on § 3.4(d)(3), he likely knew of the other provisions in § 3.4, including § 3.4(a).

B. Count II—Failure to Pay Full Pension Benefits

In Count II (a certified class claim), Mr. Barnes argued that the Defendant Plan had failed to pay full pension benefits. Initially, Mr. Barnes filed suit against the Defendant Plan as a lump-sum payee in his individual capacity only. However, on January 26, 2010, he moved to amend his complaint, and one of the amendments he proposed was to include class allegations. See Docket No. 39 (motion). The proposed class consisted of persons who had not been paid a benefit known as a “redetermined ATB,” implicitly pursuant to § 3.4(d)(3) of the plan.

Under § 3.4(d)(3) of the Plan, [i]f the Employee was receiving, or was eligible to receive, a monthly pension under the accelerated transition benefit [ATB] formula at his or her prior Termination of Employment, the Employee's Plan benefit at the Annuity Start Date(s) following his or her next Termination of Employment will be equal to (x) plus (y) where:

(x) is the monthly benefit payable at the Employee's prior Termination of Employment under Section 5.1, except that if the prior benefit was subject to an age discount under Section 5.2, and the Employee's service is bridged under Section 7.4(a), the benefit will be adjusted to reflect the Employee's age and Term of Employment under Section 7.7 at the Employee's next Termination of Employment; and

(y) is the monthly cash balance benefit under Section 4.5(b) based on allocations to the Employee's Account from the Employee's rehire date to the Annuity Start Date that applies to the cash balance benefit.

Docket No. 39–1 (Prop. Am. Compl. ¶ 50). The (x) value above represented the redetermined ATB. The (y) value above represented a separate benefit, known as the cash balance benefit. As a lump-sum payee, Mr. Barnes had been paid a cash balance benefit, but he had not been paid a redetermined ATB. Mr. Barnes asserted that he was also entitled to a redetermined ATB, and not just a cash-balance benefit, under § 3.4(d)(3). As indicated above, however, the Defendant Plan's position was that § 3.4(a), and not § 3.4(d)(3), governed the rights of lump-sum payees such as Mr. Barnes.

In Mr. Barnes's proposed amended complaint, the class was defined as follows:

(1) Participants of the PTG Pension Plan, who meet the following requirements:

(a) who terminated their employment with a company that participated in the PTG Pension Plan after March 22, 1996;

(b) who were eligible for a ATB, which, because they had not attained the requisite age or years of credited service, was subject to an ATB Discount,

(c) who were subsequently rehired by a company that participated in the PTG Pension Plan on or before October 31, 1997, and worked at least five additional years; and

(d) who, either (i) at their next termination, did not have their ATB adjusted to reflect their age and term of employment at their next termination of employment or (ii) are still employed at a Participating Company.

(2) Beneficiaries of any of the persons described in Group 1.

Docket No. 39–1 (Prop. Am. Compl. ¶ 15).

While the proposed class definition did not explicitly include annuitants as members of the class (in addition to lump-sum payees such as Mr. Barnes), implicitly, annuitants were included because an annuitant, like a lump-sum payee, could be an employee “receiving, or ... eligible to receive, a monthly pension under the accelerated transition benefit [ATB] formula at his or her prior Termination of Employment” as stated in § 3.4(d)(3).¹ The proposed class, however, was expressly limited to persons who had not been given, in effect, a full ATB. See Docket No. 39–1 (Prop. Am. Compl. ¶ 15) (alleging, in class definition, that class members did not, at their next termination, “have their ATB adjusted to reflect their age and term of employment at their next termination of employment”). The proposed class did not put at issue any benefits other than the ATB, such as a cash balance benefit. Judge Patel granted the motion to amend.

Subsequently, Mr. Barnes moved for class certification. Judge Patel granted that motion as well, although she limited the class definition to lump-sum payees only— i.e., excluding annuitants. See Docket No. 176 (Order at 12–13). A few months later, on December 20, 2010, Mr. Barnes moved to modify the class definition so that annuitants (in particular, deferred annuitants) would be included in the class. See Docket No. 199 (motion). More specifically, Mr. Barnes asked Judge Patel to adopt the original class definition that he had proposed based on 30(b)(6) deposition testimony that had been given on behalf of the Defendant Plan. See Docket No. 199 (Mot. at 6). As noted above, Mr. Barnes's original class definition was targeted to individuals who had not been given a redetermined ATB.

The Defendant Plan opposed the motion to modify. With respect to deferred annuitants, the Defendant Plan argued that Mr. Barnes had misconstrued the testimony of the 30(b)(6) deponent, Hannah Francis:

Plaintiff argues that, based on Ms. Francis's testimony, the Plan does not afford deferred annuitants with a “redetermined ATB” upon their second termination. The argument takes the term “redetermined ATB” out of context and ignores the sum and substance of Ms. Francis's testimony. If an employee does not elect to commence the distribution of his or her annuity and is rehired by a Participating Company, then upon the employee's second termination he or she is treated as if they never left the Company's employment at all, and the...