Frommert v. Conkright

223 F.Supp.3d 140

Paul J. FROMMERT, et al., Plaintiffs,

v.Sally L. CONKRIGHT, et al., Defendants.

00–CV–6311L

United States District Court, W.D. New York.

Signed December 12, 2016

George A. Schell, Jr., Schell & Schell, Fairport, NY, Peter K. Stris, Stris & Maher LLP, Gardena, CA, Robert H. Jaffe, Robert H. Jaffe & Associates, P.A., Springfield, NJ, Shaun P. Martin, San Diego, CA, Amber M. Ziegler, John A. Strain, Law Offices of John A. Strain, Manhattan Beach, CA, Matthew J. Fusco, Trevett, Cristo, Salzer & Andolina P.C., Rochester, NY, for Plaintiffs.

Margaret A. Clemens, Pamela S.C. Reynolds, Littler Mendelson, P.C., Fairport, NY, Amy Ventry–Kagan, Littler Mendelson, P.C., Melville, NY, Robert A. Long, Jr., Robert D. Wick, Covington & Burling LLP, Washington, DC, for Defendants.

DECISION AND ORDER

DAVID G. LARIMER, United States District Judge

The Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. , permits participants or beneficiaries of an ERISA plan to bring a civil action to recover benefits due to them under the terms of their plan, to enforce their rights under the terms of the plan, or to clarify their rights to future benefits under the terms of the plan. See 29 U.S.C. § 1132(a)(1)(B). Section 502(g) of ERISA, 29 U.S.C. § 1132(g), also provides that a court in an ERISA case may, in its discretion, allow "reasonable attorney's fees and costs ... to either party." 29 U.S.C. § 1132(g)(1).

This case involves a claim for benefits by a group of plaintiffs who work or have worked for Xerox Corporation. Aside from the general principles cited in the preceding paragraph, little if anything has not been disputed by the parties in this case. That includes plaintiffs' motions for attorney's fees, which are now before the Court. (Dkt. # 241, # 327.) The parties disagree about whether plaintiffs are entitled to any award of fees, and if so, about virtually every aspect of how to calculate an appropriate award. Plaintiffs seek over $7.6 million in attorney's fees; defendants contend that plaintiffs should be awarded either no fees at all, or a drastically reduced sum.

DISCUSSION

I. Attorney's Fee Awards Under ERISA

ERISA's fee-shifting statute provides that "the court in its discretion may allow a reasonable attorney's fee and costs ... to either party." 29 U.S.C. § 1132(g)(1). "It is well-established that 'Congress intended the fee provisions of ERISA to encourage beneficiaries to enforce their statutory rights.' " Donachie v. Liberty Life Assurance Co. of Boston , 745 F.3d 41, 45–46 (2d Cir. 2014) (quoting Slupinski v. First Unum Life Ins. Co. , 554 F.3d 38, 47 (2d Cir. 2009) ). See also Locher v. Unum Life Ins. Co. of America , 389 F.3d 288, 298 (2d Cir. 2004) (" 'ERISA's attorney's fee provisions must be liberally construed to protect the statutory purpose of vindicating retirement rights") (quoting Chambless v. Masters, Mates & Pilots Pension Plan , 815 F.2d 869, 872 (2d Cir. 1987), abrogated on other grounds as stated in Janese v. Fay , 692 F.3d 221, 223–27 (2d Cir. 2012) ).

In that regard, the Second Circuit has explained that "in light of the ERISA fee provision's 'statutory purpose of vindicating retirement rights,' granting a prevailing plaintiff's request for fees is appropriate absent 'some particular justification for not doing so.' " Donachie , 745 F.3d at 47 (quoting Locher , 389 F.3d at 298, and Birmingham v. SoGen–Swiss Int'l Corp. Ret. Plan , 718 F.2d 515, 523 (2d Cir. 1983) ).

The Supreme Court has interpreted § 1132(g)(1) as allowing a court, in its discretion, to award fees and costs to either party, "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, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010) (quoting Ruckelshaus v. Sierra Club , 463 U.S. 680, 694, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983) ). As the Supreme Court has put it, an attorney's fee claimant

does not satisfy that requirement by achieving trivial success on the merits or a purely procedural victory, but does satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether a particular party's success was substantial or occurred on a central issue.

Id. at 255, 130 S.Ct. 2149 (internal quotes and alterations omitted). Thus, where a party has achieved some degree of success on the merits, the Court may conclude that an award of attorney's fees is appropriate. Donachie , 745 F.3d at 46. See also Scarangella v. Group Health, Inc. , 731 F.3d 146, 151, 152 (2d Cir. 2013) (stating that "ERISA does not contain a prevailing party standard and instead provides district courts with broader discretion in determining when and to whom attorney's fees should be awarded," and that "[t]he Supreme Court in Hardt appears to have left room for many factual scenarios to satisfy the standard of some success on the merits").

In addition to whether the fee applicant has obtained some degree of success on the merits—which the court must consider—the court may also consider the five so-called Chambless factors:

(1) the degree of opposing parties' culpability or bad faith; (2) ability of opposing parties to satisfy an award of attorneys' fees; (3) whether an award of attorneys' fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys' fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the parties' positions.

Donachie , 745 F.3d at 46 (citing Hardt and Chambless ). While the weight to be given to those factors may differ from one case to another, a "court cannot selectively consider some factors while ignoring others." Id. at 47.

II. Application to this Case

A. Plaintiffs' Entitlement to a Fee Award

Defendants contend that plaintiffs' fee request should be denied in its entirety, or at least drastically reduced as compared to plaintiffs' request. In their brief (Dkt. # 294), defendants contend that "this Court should exclude fees entirely," and that "[o]f the remaining fees sought, this Court should substantially reduce the fees...." It is not clear what they mean by that. If the Court were to "exclude fees entirely," there would be no "remaining fees" to reduce.

In any event, defendants' assertion that plaintiffs' fee request should be denied outright is plainly wrong. The law is clear that a fee award is appropriate if the fee applicant has "obtained some degree of success on the merits...." Hardt , 560 U.S. at 255, 130 S.Ct. 2149. And there can be no question that plaintiffs in this case have met that standard. They have obtained "favorable judicial action on the merits." Scarangella , 731 F.3d at 152.

If nothing else, this litigation has established that defendants violated ERISA through their application of the "phantom account" to employees who retired before the existence and operation of that account was fully disclosed in 1998, and that plaintiffs who were adversely affected by that inequitable conduct are entitled to relief. See Frommert v. Conkright , 433 F.3d 254 (2d Cir. 2006) (explaining the details of the phantom account and why it violated ERISA).

Despite all the intervening decisions in this case, that has not changed. See Frommert v. Becker , 153 F.Supp.3d 599, 609–10 (W.D.N.Y. 2016) (explaining why Xerox's continued application of the phantom account was unjustified, and why a remedy was required). The litigation over the past several years has mostly focused on how best to remedy that violation. By defendants' own admission, they have paid out some four million dollars to plaintiffs, based on decisions issued by this Court and by the Court of Appeals for the Second Circuit.¹ This Court's January 5, 2016 Decision and Order directed defendants to recalculate and pay plaintiffs their retirement benefits, in accordance with a formula set forth by the Court. See Dkt. # 283. That directive put plaintiffs in a better position than they would have been, under the phantom-account formula.

It can scarcely be disputed, then, that the parties' relationship has been materially altered, to the benefit of the plaintiffs. Plaintiffs have "achieved far more than 'trivial success on the merits' or a 'purely procedural victory.' "

Hardt , 560 U.S. at 256, 130 S.Ct. 2149 (quoting Ruckelshaus , 463 U.S. at 688 n.9, 103 S.Ct. 3274 ). They have received a clear, indisputable, and measurable benefit.

Aside from their blanket assertion that plaintiffs should not be awarded any attorney's fees at all, defendants contend that even if the Court were to award fees, plaintiffs should not get nearly as much of an award as they seek. In support of that argument, defendants raise a variety of objections to plaintiffs' request.

Defendants contend that plaintiffs should receive no attorney's fees at all for work they performed after 2012, on the ground that plaintiffs achieved no success on the merits during that period. See Def. Mem. (Dkt. # 294) at 7–11. Defendants have apparently backed off their prior contention that plaintiffs should receive no fees for work performed after January 24, 2007, see Dkt. # 245 at 23–25, but they contend that the Court should reduce those fees, to reflect plaintiffs' alleged lack of success on the merits from that date on.

Defendants also argue that no fees should be awarded for time spent by plaintiffs' former counsel, the late Robert Jaffe, for work that, according to defendants, was not related to this action. Defendants raise similar arguments concerning work performed by plaintiffs' present counsel, on the ground that much of that work was not performed in connection with this action. Defendants further argue that plaintiffs' attorney's time records are inadequate, that much of the work for which plaintiffs seek compensation is redundant and excessive,...