Serv. Emps. Int'l Union Nat'l Indus. Pension Fund v. Bristol Manor Healthcare Ctr., Inc.

SERVICE EMPLOYEES INTERNATIONAL UNION NATIONAL INDUSTRY PENSION FUND, et al., Plaintiffs, v. BRISTOL MANOR HEALTHCARE CENTER, INC., Defendant.

Civil Action No.: 12-1904 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

June 30, 2016

Re Document No.: 43

MEMORANDUM OPINION

GRANTING PLAINTIFFS' PETITION FOR ATTORNEYS' FEES AND COSTS AND ADDITIONAL DAMAGES

I. INTRODUCTION

In this action, Plaintiffs Service Employees International Union Industry Pension Fund ("the Fund") and associated trustees seek an award of attorneys' fees and costs and additional damages incurred in the course of a claim against Defendant Bristol Manor Healthcare Center, Inc. ("Bristol Manor") for failure to pay required contributions to the Fund, as required under the parties' collective bargaining and trust agreements, in violation of the Employee Retirement Income Security Act of 1974 ("ERISA")¹ and the Labor Management Relations Act of 1947 ("LMRA").² See Pls.' Pet. For Att'ys' Fees and Costs & Add'l Damages, ECF No. 43 [hereinafter Pls.' Pet.]. Plaintiffs also request attorneys' fees associated with preparing their replyto Defendant's opposition. See id. Defendant disputes Plaintiffs' entitlement to attorneys' fees and, in the alternative, the reasonableness of the fee request and the request for additional damages. See Def.'s Br. Supp. Opp'n Pls.' Appl. Att'ys' Fees & Costs & Add'l Damages, ECF No. 46 [hereinafter Def.'s Opp'n]. The Court concludes that Plaintiffs are entitled to attorneys' fees for their original litigation, that their request is reasonable, and that they are entitled to the additional damages. Plaintiffs are also entitled to attorneys' fees for preparation of their reply. To correct minor inconsistencies in Plaintiffs' request, the Court uses amounts found in Plaintiffs' original petition (minus a deduction for a duplicative entry) to award fees. Accordingly, the Court grants Plaintiffs' petition for attorneys' fees and costs and additional damages in the amount of $33,064.90.³

II. FACTUAL BACKGROUND

The Court set out extensive factual background in its Memorandum Opinion granting Plaintiffs' Motion for Summary Judgment, and only salient facts are laid out here. See SEIU Nat'l Indus. Pension Fund v. Bristol Manor Healthcare Ctr., No. 12-1904, 2016 WL 354873 (D.D.C. Jan. 28, 2016); see also Jan. 28, 2016 Mem. Op., ECF No. 42 [hereinafter Mem. Op.]. Defendant Bristol Manor entered into a collective bargaining agreement with 1199 SEIU United Healthcare Workers East, New Jersey Region. See Pls.' Statement Ex. 1, at 8, 40, ECF No. 36-1[hereinafter Collective Bargaining Agreement]. The agreement required Bristol Manor to make contributions to the Fund based on the number of hours worked by employees, including Certified Nursing Assistants; dietary, housekeeping, and recreational aides; Licensed Practical Nurses; and other employees. See id. at 8. Pursuant to the collective bargaining agreement, Bristol Manor agreed to be bound to a trust agreement that established the Fund and the Fund's collection polices, which obligated Bristol Manor to send required contributions and remittance reports to the Fund. See id. at 33; see also Pls.' Statement Ex. 2, ECF No. 36-2 [hereinafter Trust Agreement]; Pls.' Statement Ex. 3, ECF No. 36-3 [hereinafter Collections Policy].

The Fund set procedures for collecting contributions through a "Statement of Policy for Collection of Delinquent Contributions." See generally Collections Policy. Contributions had to be made "by the 15th of the month following the month in which work was performed for which the contributions are owed" and be accompanied by remittance reports. Id. §§ 2.1, 2.2. Both the Trust Agreement and Collections Policy declared that the Fund could collect interest and liquidated damages on delinquent contributions in addition to attorneys' fees and costs in the event a lawsuit was filed. See Trust Agreement Art. III, § 3.2; Collections Policy §§ 2.4, 5.1-5.4. Both policies stated that these obligations were "contractual in nature and independent of provisions of ERISA" that governed awards of attorneys' fees, codified at 29 U.S.C. § 1132(g). Collections Policy § 5.5. Between May 2010 and June 2015, the Fund received many of the required contributions late, and some contributions were not received at all. See Anderson Decl. Exs. A-C, ECF No. 36-6; Janinski Decl. Ex. A, ECF No. 37-4. The Fund accordingly assessed interest and liquidated damages on Bristol Manor's late and unpaid contributions. See Anderson Decl. Exs. A-C; Janinski Decl. Ex. A. Plaintiffs filed suit under ERISA and LMRA to collect the unpaid contributions, interest, and liquidated damages owed them by Bristol Manor and to obtain audit documents. See Compl. 1-2, 6, ECF No. 1. After over nearly a year of delay due to difficulties serving Bristol Manor, the clerk entered default in favor of Plaintiffs; the Court later vacated the entry of default and allowed the case to proceed to discovery. See SEIU Nat'l Indus. Pension Fund v. Bristol Manor Healthcare Ctr., 307 F.R.D. 37, 39-43 (D.D.C. 2014) (spelling out this case's history in greater detail). After discovery, Plaintiffs moved for summary judgment on their claims against Bristol Manor. See Pls.' Mot. Summ. J., ECF No. 36. Plaintiffs sought outstanding contributions, liquidated damages, interest, and attorneys' fees and costs. See Pls.' Mem. P. & A. Supp. Mot. Summ. J. at 1, 8, ECF No. 36. The Court granted Plaintiffs' motion and directed both parties to "submit briefing on the appropriate award of fees and costs." See Mem. Op. at 29.

Plaintiffs now petition for attorneys' fees and costs and additional damages. See generally Pls.' Pet. Following their reply, Plaintiffs ultimately seek $19,023.60 in attorneys' fees and costs and $14,014.25 in additional damages for the period of June 2015 through December 2015.⁴ See Pls.' Reply at 9, ECF No. 47.

III. ANALYSIS

A. Plaintiffs' Entitlement to Attorneys' Fees

The parties dispute whether Plaintiffs are entitled to attorneys' fees under ERISA. A court "in its discretion" may award "a reasonable attorney's fee and costs of action to either party" for any action arising under ERISA. 29 U.S.C. § 1132(g)(1). If the action is brought undersection 1145 to recover contributions to a multiemployer plan pursuant to a collective bargaining agreement, however, "the court shall award the plan . . . reasonable attorney's fees and costs of the action" if the plan receives a judgment in its favor. Id. § 1132(g)(2)(D) (emphasis added). The award of attorneys' fees under section 1132(g)(2) is mandatory and "does not fall to the discretion" of a court. Connors v. Brady-Cline Coal Co., 668 F. Supp. 5, 10 (D.D.C. 1987); see also United Retail & Wholesale Emps. Teamsters Union v. Yahn & McDonnell, Inc., 787 F.2d 128, 134 (3d Cir. 1986) ("[T]he language of [section 1132(g)(2)] is mandatory."); Trs. of Amalgamated Ins. Fund v. Geltman Indus., 784 F.2d 926, 931 (9th Cir. 1986) ("[F]ees are mandatory . . . under 29 U.S.C. § 1132(g)(2)."); 4 Alba Conte, Attorney Fee Awards § 27:3 (3d ed. 2016) (explaining that "§ 1132(g)(2) is mandatory"). The purpose of this provision is to "encourage enforcement of employer contributions" and protect funds from "the high cost of litigation and collection expenses." Sheet Metal Workers Health & Welfare Tr. Fund v. Big D Serv. Co., 876 F.2d 852, 854 (10th Cir. 1989) (per curiam).

Defendant argues that section 1132(g) requires a two-step test. Under the first step, a court must first decide if a party is entitled to attorneys' fees at all using five factors described in Eddy v. Colonial Life Insurance Co. of America, 59 F.3d 201 (D.C. Cir. 1995). See Def.'s Opp'n at 4. If the court finds that the party is entitled to fees, Defendant argues, then a court must apply the lodestar analysis by multiplying the number of reasonable hours by the reasonable hourly rate to determine the amount of the award. See id. Defendant asserts that Plaintiffs are not entitled to attorneys' fees because they cannot demonstrate bad faith or that such an award is "necessary as a deterrent." See id. at 5. Finally, Defendant states that Plaintiffs should not be "rewarded . . . for muddying the waters" by providing inconsistent amounts of what was owed to Plaintiffs in contributions to the Fund. See id.

As Plaintiffs correctly state in their reply, Defendant fails to consider the applicability of section 1132(g)(2) to Plaintiffs. Pls.' Reply at 1-2. Plaintiffs have brought their action under section 1145 and received a judgment in their favor. Thus, they fulfill the requirements of section 1132(g)(2) and are entitled to "reasonable attorney's fees and costs of the action." 29 U.S.C. § 1132(g)(2)(D). Because an award under section 1132(g)(2) is mandatory, the Court does not consider factors as it would be required to do in a petition for attorneys' fees under section 1132(g)(1).⁵

B. Reasonableness of Plaintiffs' Request for Attorneys' Fees

Defendant argues in the alternative that Plaintiffs' request for attorneys' fees must be "adjust[ed] down" because Plaintiffs have failed to meet the burden of demonstrating that their request is reasonable. See Def.'s Opp'n at 5. A reasonable attorneys' fee is initially calculated by "multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate." Blum v. Stenson, 465 U.S. 886, 888 (1984). This produces the lodestar figure, which is subject to revision upward "only in 'exceptional' circumstances," Murray v. Weinberger, 741 F.2d 1423, 1428 (D.C. Cir. 1984) (quoting Blum, 465 U.S. at 897), but may beadjusted downward "by a reasonable percentage" due to inconsistencies in billing records or requests. See, e.g., Role Models Am., Inc. v. Brownlee, 353 F.3d 962, 973 (D.C. Cir. 2004).⁶

1. Hourly Rate

Courts first consider the reasonableness of the hourly rate. See Role Models, 353 F.3d at 968. The reasonableness of a rate is calculated by reference to the "prevailing...