United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
Lynn Winmill Chief U.S. District Court Judge.
Court has before it Plaintiffs' Renewed Motion for
Attorney Fees (Dkt. 351) and Motion for Order for Leave to
File Supplemental Briefing (Dkt. 356). The motions are fully
briefed and at issue. For the reasons explained below, the
Court will GRANT the Renewed Motion for Attorney Fees in part
(Dkt. 351), and the Motion for Leave to File Amended Briefing
(Dkt. 356) will be DEEMED MOOT.
background of this case is well known to each party.
Previously, this Court considered Plaintiffs' Motion for
Attorney Fees (Dkt. 313) and held that Plaintiffs had not
attained “some degree of success on the merits.”
(Dkt. 323). On appeal, the Ninth Circuit disagreed. See
Brasley v. Fearless Farris Serv. Stations, 714 Fed.Appx.
790, 791 (9th Cir. 2018). On remand, the Court now considers
whether the factors delineated in Hummell v. S.E. Rykoff
& Co., 634 F.2d 446, 453 (9th Cir. 1980) justify a
discretionary award of both district court and appellate
attorney fees. Id.
Court “in its discretion may allow a reasonable
attorney's fee and costs of action to either party”
in an ERISA action. Simonia v. Glendale Nissan/Infiniti
Disability Plan, 608 F.3d 1118, 1120 (9th Cir. 2010);
see also 29 U.S.C. § 1132(g)(1). The party
claiming fees and costs need not be the prevailing party but
must show some degree of success on the merits. Id.
(citing Hardt v. Reliance Standard Life Ins. Co.,
560 U.S. 242, 252 (2010)). A “claimant can satisfy that
requirement if the court can fairly call the outcome of the
litigation some success on the merits without conducting a
lengthy inquir[y] into the question whether a particular
party's success was substantial or occurred on a central
issue.” Id. at 1120-21 (citing Hardt,
560 U.S. at 255). Once a party establishes “some degree
of success on the merits, ” the Court may exercise its
discretion to grant fees and costs under § 1132(g)(1).
Id. The five factors set forth in Hummell v.
S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980)
guide this Court's decision.
“(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' positions.”
of the Hummell factors is necessarily decisive;
various permutations and combinations can support an award of
attorney fees.” Paddack v. Morris, 783 F.2d
844, 846 (9th Cir. 1986). Unless Defendants can show the
existence of “special circumstances [that] would render
such an award unjust, ” the Court's discretionary
decision will stand. McElwaine v. U.S. W., Inc., 176
F.3d 1167, 1172 (9th Cir. 1999).
Plaintiffs' Motion for Attorney Fees Prior to
court will grant Plaintiffs' request for a fee award at
the district court level. The Ninth Circuit determined, on
appeal, that Plaintiffs had attained some degree of success
in this Court (9th Cir. Dkt. 54). For that reason, the Court
now applies the Hummel factors to the fees incurred
between 2010 and 2015.
parties urge this Court to consider different conduct when
weighing the first factor. Defendants suggest the court weigh
the Plaintiffs' post-judgment conduct. Def.'s
Opp. Br., Dkt. 352, pp. 10-11. However, in this case,
the Defendants are the “non-claiming party.”
See Micha v. Sun Life Assurance of Can., Inc., 874
F.3d 1052, 1058 (9th Cir. 2017). As such, the Defendants
conduct is squarely at issue and will not be disregarded.
on the other hand, would have this Court consider all of
Defendants' conduct before and after the time of filing
in 2008. Dkt. 351, pp. 2-8. In support of this view,
Plaintiffs cite to Micha v. Sun Life Assurance of Can.,
Inc., which holds that the court must consider any
pre-appeal bad faith or culpability in determining whether to
award attorney fees. 874 F.3d at 1058. However,
Micha concerned a factually distinct case.
Micha, the plaintiffs were awarded litigation
attorney fees and the defendants appealed to insulate itself
from the award of fees. Id. at 1054-55. The
defendants then aggressively fought the award on appeal, even
filing a petition for certiorari, causing significant
expenses to the appellees. Id. Unlike
Micha, here Plaintiffs were awarded attorney fees by
this Court, which were paid. Dkt. 173. Now Plaintiffs move
for attorneys' fees a second time. Unlike the defendants
in Micha, here Defendants were not attempting to
insulate themselves by appealing an award of fees after the
2010 trial. Rather, it was Plaintiffs who challenged the
sufficiency of Defendants' compliance with the judgment,
which continued the litigation. Thus, Micha is
distinguishable from the case at hand.
the Court previously determined that forcing the Plaintiffs
to litigate these issues at a jury trial with a judgment in
hand constituted “at least some degree of culpability
or bad faith on the part of Defendants.” Dkt. 167. But
Defendants paid or settled that order of $390, 153.60 in
attorney fees after the 2010 trial. Dkt. 172. To again
consider those acts would be unjust. Fairness requires this
Court to consider whether Defendants acted with bad faith
solely during post-judgment litigation.
the Court issued its Amended Judgment, Defendants were left
to “fund a plan, qualified and consistent with the
requirements of ERISA.” Dkt. 145, ¶ 6. Defendants
attempted to create this qualified plan, but upon
Plaintiffs' objection the Special Master ultimately
determined that “the Defendants [could not] fully
comply with the Court's Amended Judgment and related
Order because doing so would violate ERISA or tax law.”
Dkt. 245, pp. 12. Thus, the Court's Amended Judgment left
Defendants between a rock and a hard place: no matter how
they proceeded, Defendants would ultimately be in violation
of federal law or the Amended Judgment.
that Defendants' effort to comply with the Amended
Judgment constituted bad faith would punish Defendants for
trying to resolve this issue in accordance with the
Court's terms. Instead, the Court faults the subsequent
litigation on a lack of precedent and the inherent
complexities of ERISA law. For this reason, bad faith will
not be attributed to Defendants' post-judgment conduct.
Ability to Satisfy a Fee Award
action is brought by an ERISA beneficiary, a defendants'
“ability to pay should weigh strongly in favor of an
award of attorney fees. Micha, 874 F.3d at 1058
(citing Smith v. CMTA-IAM Pension Trust, 746 F.2d
587, 590 (9th Cir. 1984)). Like in 2010, Defendants concede
that their ability to pay is greater than that of Plaintiffs.
Dkt. 352-1, pp. 11. Yet, Defendants also argue that
Plaintiffs' counsel are “well able to absorb the
loss of attorney fees for their pre-appeal conduct.”
Id. This argument improperly conflates two distinct
factors: (1) bad faith, and (2) the parties ability
to satisfy an award. In considering the latter, the Court
evaluates the “resources available to the
pensioners” not their attorneys. Smith, 746
F.2d at 590. Because Defendants do not dispute their ability
to pay a fee award or argue that Plaintiffs are better suited
to do so, this factor weighs in favor of Plaintiffs.
Whether A Fee Award Would Deter Others
an award of attorney's fees may deter future defendants
from short changing judgments awarded for ERISA violations,
Defendants argue that such an award may also encourage
plaintiffs to frivolously challenge compliance with the court
judgments. These are serious risks. On one hand, courts
impose judgments in ERISA cases with the expectation that
beneficiaries will be made whole. See McElwaine, 176
F.3d at 1171-74 (an award would “deter other employers
from forcing beneficiaries to undertake costly litigation to
preserve their claims”). On the other, courts want to
deter beneficiaries from bringing meritless claims.
the Ninth Circuit has characterized Plaintiffs'
post-judgment conduct in a favorable light. On appeal, the
Court found that Plaintiffs had some success on their claims
in post-judgment litigation. To the extent that Defendants
argue that a large portion of the fees sought in this matter
are related to the unsuccessful and meritless positions
Plaintiffs took post-judgment, the Court rejects that
argument. Because the Court of Appeals held that
Plaintiffs' post-judgment claims had merit, imposing a
fee award against Defendants would more likely deter
employers from short changing employees' ERISA judgments
than encourage “other litigants from relentlessly
pursuing groundless [post-judgment] claims.” Credit
Managers Assoc. v. Kennesaw Life & Acc. Ins. Co., 25
F.3d 743, 748 (9th Cir. 1994). Therefore, the third
Hummel factor also weighs in favor of an award of
Benefit to All Participants/Significant Legal
are two considerations within the fourth Hummel
factor. The first concerns whether Plaintiffs sought to
benefit all participants and beneficiaries. Hummel,
634 F.2d at 453. As to this question, the Court agrees with
Plaintiffs' characterization of the 2010-2015 litigation
as impacting “most or all Participants.” Dkt.
353, pp. 9. From 2008 to 2010, Plaintiffs represented 28
Participants from the 1995 Plan liquidated by Defendant. Dkt.
351, pp. 4. Approximately twelve participants settled their
claims with Defendants from 2010 to 2015, leaving seventeen
Participants to benefit from Plaintiffs' post-judgment
work. Id. Given that a majority of the remaining
Plan beneficiaries were represented, the Court agrees that
Plaintiffs sought to benefit all remaining participants
the Court determines whether Plaintiffs sought to resolve any
significant legal questions. Hummel, 634 F.2d at
453. Defendants invite the Court to focus, in large part, on
the past three years of post-judgment litigation. Defendants
argue that litigation from 2015-2018 has only focused on
attorney fees, and therefore should not constitute a
significant legal question. The Court declines to restrict
its analysis to the prior three years. Before 2015,
Plaintiffs litigated some important ERISA issues concerning
Defendants' satisfaction of the Amended Judgment. These
issues were important because they related to the repayment
of Plaintiffs' liquidated benefits. Others were not.
Because these issues did or would have benefited the
seventeen remaining participants, this factor weighs in favor
of Plaintiffs' award.
Relative Merits of the Parties'
Plaintiffs overstate their success on the merits of this
case, the last Hummel factor also weighs in favor of
granting attorney fees. In addition to the outcome of the
underlying suit, the court may analyze under this factor
whether the law was clear at the time of litigation, whether
the losing party had a strong equitable argument despite it
ultimately being foreclosed on, and whether the losing
party's position was simply “incorrect”
rather than “unmeritorious”. Honolulu Joint
Apprenticeship & Training Comm. of United Assoc. Local
Union No. 675 v. Foster, 332 F.3d 1234 (9th Cir. 2003).
When considering the fifth factor, “courts should be
careful neither to penalize [parties] for seeking to ...