United States District Court, N.D. California
ORDER ON MOTION FOR ATTORNEYS' FEES AND
PREJUDGMENT INTEREST Re: Dkt. No. 69
M. RYU UNITED STATES MAGISTRATE JUDGE
Joan Gurasich ("Plaintiff") brought this action
under the Employee Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. § 1001 et seq.,
against Defendant IBM Retirement Plan ("IBM Plan"),
as well as Defendant International Business Machines
Corporation ("IBM") as the Plan Administrator
(collectively "Defendants"). Plaintiff prevailed on
her claim for retirement benefits under the IBM Plan and now
moves for attorneys' fees and prejudgment interest.
Motion for Attorneys' Fees and Prejudgment Interest
("Mot.") [Docket No. 69].
following reasons, Plaintiff's motion is granted in part.
Plaintiff is awarded attorneys' fees in the amount of
$249, 871.50 and prejudgment interest in the amount of $2,
factual history of this case is set out fully
elsewhere. A brief history follows.
Plaintiff's Employment History
began working for ROLM Corporation ("ROLM") on
January 24, 1980. In 1984, IBM acquired ROLM. As a result of
that acquisition, Plaintiff became an IBM employee
and a participant in the IBM Plan.
leaving IBM on February 15, 1990, Plaintiff worked
at Siemens PN from February 19, 1990 until July 24, 1997, and
became a vested participant in the Siemens Retirement Plan.
On February 1, 2012, Plaintiff began receiving a monthly
benefit under the Siemens Retirement Plan, which was
calculated based on an employment history from January 24,
1980 to July 24, 1997, even though Plaintiff did not begin
working for Siemens until February 19, 1990.
Plaintiff's Claim for Benefits Under the IBM
years following her separation from IBM, the IBM Plan sent
Plaintiff numerous communications stating that she had a
vested benefit under that plan. On April 2, 2013, Plaintiff
sent a Pension Election Confirmation package to the IBM
Employee Services Center. On July 10, 2013, Plaintiff called
the IBM Employee Services Center and was told that she was
not eligible under the IBM Plan. Plaintiff requested a
written explanation of the basis for the denial of her claim.
On October 1, 2013, the Plan Administrator sent Plaintiff a
denial letter, explaining that Plaintiff had terminated her
employment with IBM in 1990 pursuant to an agreement between
IBM and ROLM, which included a pension asset transfer of
Plaintiff s IBM employment service to ROLM for inclusion in
any subsequent ROLM pension benefit calculation. The letter
stated that, because the IBM Plan had already paid a benefit
on Plaintiffs behalf for her service from January 24, 1980 to
February 15, 1990, Plaintiff was ineligible for any future
IBM pension benefit or service calculations. Finally, the
letter explained that ROLM had since been acquired by
Siemens, and that IBM had made an inquiry to Siemens and
determined that Plaintiff was receiving Siemens pension
benefits that included her previous IBM service dates.
October 8, 2013, Plaintiffs attorney, Kathryn Curry
("Curry"), sent a letter to the Plan Administrator
requesting documents related to her claim for benefits. On
November 11, 2013, the Plan Administrator responded to
Plaintiffs request by forwarding a July 9, 2013 email
exchange between Siemens and the IBM Plan that confirmed that
Plaintiffs Siemens pension was based on service from 1980 to
1997, plus copies of the 1989 and 1994 IBM Retirement Plans.
Curry requested a copy of the 1990 purchase agreement between
IBM and ROLM that was referenced in the denial of her claim,
but the Plan Administrator did not provide one.
through Curry, appealed the denial of her claim for IBM Plan
benefits on December 3, 2013. On March 6, 2014, the Plan
Administrator upheld the denial of Plaintiff's claim.
24, 2014, Plaintiff, through her attorneys Curry and Tracy
Tierney ("Tierney"), filed a complaint against
Defendants asserting four claims under ERISA: 1) recovery of
Plan Benefits pursuant to 29 U.S.C. § 1132(a)(1)(B); 2)
breach of fiduciary duties pursuant to 29 U.S.C. § 1104;
3) equitable relief pursuant to 29 U.S.C. § 1132(a); and
4) failure to provide requested plan information pursuant to
29 U.S.C. § 1132(c).
filed a motion for partial dismissal, which the court denied.
[Docket Nos. 18, 24.] Defendants subsequently moved for
summary judgment on all four of Plaintiff's claims, and
Plaintiff made a cross motion for summary judgment on her
first and fourth claims. [Docket Nos. 35, 42.] The court
issued an order granting summary judgment to Plaintiff on her
first claim for recovery of plan benefits, denying as moot
her second and third claims for equitable relief, and
granting summary judgment to Defendants on the fourth claim
for failure to provide requested plan information. Order on
Motions for Summary Judgment ("MSJ Order") [Docket
No. 60]. On February 11, 2016, the court entered judgment
awarding Plaintiff past due benefits under the IBM Plan in
the amount of $47, 966.10, as well as future benefits
pursuant to the terms of the Plan (providing for monthly
payment of $978.90). [Docket No. 65.] Plaintiff filed a Bill
of Costs, and the Clerk granted $400.00 in taxable costs
against Defendants. [Docket Nos. 68, 76.] Plaintiff
subsequently filed the present motion, requesting an award of
attorneys' fees pursuant to 29 U.S.C. § 1132(g) in
the amount of $285, 160.50, consisting of $276,
958.00 for work through the Motion, and
$8, 202.50 for work on the Reply brief.
Plaintiff also seeks $7, 672.36 in prejudgment interest. Mot.
argues that she is entitled to reasonable attorneys' fees
and costs as the prevailing party because there are no
special circumstances that would render such an award unjust.
Plaintiff further requests that the court, in its discretion,
award prejudgment interest at a higher rate than the formula
prescribed for post-judgment interest under 28 U.S.C. §
oppose the motion. Defs.' Opposition
("Opp'n.") [Docket No. 72]. They argue that
Plaintiff should not be awarded fees and prejudgment interest
at all, but if she is, the requested amounts should be
drastically reduced. They argue that the amount of fees
should be reduced to reflect the fact that Defendants
prevailed on Plaintiffs fourth claim for failure to provide
plan information. They also argue that some of the requested
fees are excessive and duplicative, especially in light of
the work that Plaintiffs attorneys did on her Administrative
Appeal for benefits, as well as Plaintiffs counsel's
professed experience and expertise in ERISA law.
Plaintiff's Entitlement to a Fee Award
requests an award of attorneys' fees pursuant to 29
U.S.C. § 1132(g) because she achieved success on her
claim for benefits under the IBM Plan. She argues that the
factors set forth by the Ninth Circuit in Hummell v. S.
E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980),
support a fee award.
The Prevailing Party is Entitled to Attorneys'
Fees Unless Special Circumstances Render
Such an Award Unjust
502(g)(1) of ERISA gives the court discretion to award
attorneys' fees. 29 U.S.C. § 1132(g)(1). The Supreme
Court has held that a fee claimant may be entitled to
attorneys' fees if the claimant shows "some degree
of success on the merits." Hardt v. Reliance
Standard Life Ins. Co., 560 U.S. 242, 255 (2010). In
addition, the Ninth Circuit has held that a prevailing plan
participant such as Plaintiff "should ordinarily recover
an attorney's fee unless special circumstances would
render such an award unjust." Smith v. CMTA-IAM
Pension Tr., 746 F.2d 587, 589 (9th Cir. 1984) (internal
quotations and citation omitted). As the Ninth Circuit has
explained, ERISA "is remedial legislation which should
be liberally construed in favor of protecting participants in
employee benefit plans" and, specifically, "to
afford them effective access to federal courts."
concede that Plaintiff meets the threshold in Hardt,
but argue that an analysis of the Hummell factors
warrants denial of Plaintiff's fee request. Opp'n. at
Application of the Hummell Factors
court determines that an ERISA fee claimant has achieved some
degree of success on the merits, the court "must
consider" the factors set forth in Hummell, 634
F.2d 446, to guide its discretion under § 1132(g).
See Simonia v. Glendale Nissan/Infiniti Disability
Plan, 608 F.3d 1118, 1119, 1121 (9th Cir. 2010). In
exercising this discretion, district courts should consider
the following factors:
(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'
Hummell, 634 F.2d at 453. "No one of the
Hummell factors . . . is necessarily decisive, and
some may not be pertinent in a given case."
Carpenters S. Cal. Admin. Corp. v. Russell, 726 F.2d
1410, 1416 (9th Cir. 1984) (citation omitted). Courts
generally construe the Hummell factors in favor of
participants in employee benefit plans. McElwaine v. U.S.
W., Inc., 176 F.3d 1167, 1172 (9th Cir. 1999)
("When we apply the Hummell factors, we must
keep at the forefront ERISA's purposes that ‘should
be liberally construed in favor of protecting participants in
employee benefit plans'") (citation omitted).
Plaintiff argues that each of these factors supports an award
of fees. Defendants contend that all of the Hummell
factors, save the second, weigh in favor of denying a fee
award. The court addresses each factor below.
Degree of the Opposing Parties' Culpability or Bad
Hummell, a party's "culpability" does
not require a finding of bad faith. IBM's failure to
fulfill its legal duty is sufficient to support an award of
fees. See Smith, 746 F.2d at 590. ("Although
bad faith is a factor that would always justify an award, it
is not required."); Caplan v. CNA Fin. Corp.,
573 F.Supp.2d 1244, 1248 (N.D. Cal. 2008); King v. Cigna
Corp., No. C 06-7025 CW, 2007 WL 4365504, at *2 (N.D.
Cal. Dec. 13, 2007) ("[F]rom a legal perspective,
Defendants are ‘culpable' in that they were found
to owe Plaintiff a legal duty that they were not
court granted summary judgment for Plaintiff because
IBM abused its discretion in denying her claim for
benefits based on an inference, rather than an investigation
of the underlying facts, where IBM had the ability
to confirm the disputed facts through reviewing its own
records and where Plaintiff provided concrete evidence in
support of her position. MS J Order at 12-13. The court
concluded that IBM's denial of benefits without relevant
information, especially personnel and benefits records in the
control of a plan administrator, amounted to an abuse of
discretion and a failure to fulfill its legal duties to
Plaintiff See Booton v. Lockheed Med. Ben. Plan, 110
F.3d 1461, 1463-64 (9th Cir. 1997) (finding that denial of a
claim without obtaining relevant information is an abuse of
discretion); Kunin v. Benefit Tr. Life Ins. Co., 910
F.2d 534, 538 (9th Cir. 1990) (burden is on plan to obtain
adequate information to make decision).
the first factor weighs in favor of a fee award.
Ability of Defendants to Satisfy an Award of Fees
concede that they are able to satisfy a fee award. Opp'n.
at 6. As the Ninth Circuit explained: "Based on this
factor alone, absent special circumstances, a prevailing
ERISA employee plaintiff should ordinarily receive
attorney's fees from the defendant." Smith,
746 F.2d at 590. The court reasoned that, absent fee
shifting, it is generally difficult for an individual plan
participant to carry the heavy burden of litigating a denial
of benefits. Id The same reasoning applies here. The
second factor thus weighs in favor of a fee award.
Degree to Which an Award Will Deter Future Conduct
court finds that the third factor also favors awarding fees
to Plaintiff ERISA does not authorize an award of
compensatory or punitive damages for bad faith behavior.
See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S.
134, 147 (1985) (holding compensatory and punitive damages
not available remedies for ERISA benefit claims). As a
result, courts acknowledge that an award of attorneys'
fees and costs is a way of deterring violations of ERISA.
Caplan, 573 F.Supp.2d at 1248 ("[A]n award of
attorneys' fees could serve to deter other plan
administrators from denying meritorious disability claims.
This could indirectly benefit other individuals.");
Carpenters S. Cal. Admin. Corp., 726 F.2d at 1416
("If defendant employers face the prospect of paying
attorney's fees for successful plaintiffs, they will have
added incentive to comply with ERISA.").
award will deter IBM and other plan administrators from
denying plan benefits based on inference and conjecture,
without verifying facts within the plan administrator's
control. This factor also weighs in favor of a fee award.
Whether Plaintiff Sought to Benefit Other Participants or
Resolve a Significant Legal Issue
suit did not seek relief for other plan participants besides
herself; she sought to recover her own pension benefits.
Plaintiff argues that the court's determination in this
case will benefit other plan participants. This is a stretch.
This case focused heavily on the specific factual
circumstances of Plaintiff s employment with a number of
related corporate entities. To the extent that the
court's decision may help other plan participants, any
such benefit is already captured in the previous factor as
deterrence against a future failure to properly investigate
information within the Plan Administrator's control.
factor is neutral at best.
The Relative Merits of the Parties' Positions
the fifth factor-the relative merits of the parties'
positions-favors a fee award. In ruling on the cross-motions
for summary judgment, the court found that IBM's denial
of benefits without consulting relevant and accessible
information amounted to a failure to fulfill its legal duties
to Plaintiff Further, Defendants failed to investigate the
facts underlying Plaintiffs claim even after Plaintiff
submitted concrete evidence in support of her ...