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Carr v. American Red Cross

argued: March 4, 1994.

PAUL F. MCPHERSON APPELLANT
v.
EMPLOYEES' PENSION PLAN OF AMERICAN RE-INSURANCE COMPANY, INC.; PENSION COMMITTEE OF EMPLOYEES' PENSION PLAN



On Appeal From the United States District Court For the District of New Jersey. (D.C. Civil Action No. 90-05019).

Before: Stapleton and Scirica, Circuit Judges, and Van Antwerpen, District Judge*fn*

Author: Stapleton

Opinion OF THE COURT

STAPLETON, Circuit Judge:

Attorneys' fees may be awarded to prevailing parties in actions brought under the Employee Retirement Income Security Act of 1974 ("ERISA"). The statute, however, provides no standard for a fee award, stating only that "the court in its discretion may allow a reasonable attorney's fee and costs of action." 29 U.S.C. § 1132(g)(1). To guide district courts as they exercise their discretion in connection with such fee applications, we have set forth five factors that must be considered:

(1) the offending parties' culpability or bad faith;

(2) the ability of the offending parties to satisfy an award of attorneys' fees;

(3) the deterrent effect of an award of attorneys' fees against the offending parties;

(4) the benefit conferred on members of the pension plan as a whole; and

(5) the relative merits of the parties' position.

Ursic v. Bethlehem Mines, 719 F.2d 670, 673 (3d Cir. 1983).*fn1 We have further instructed that there is no presumption that a successful plaintiff in an ERISA suit should receive an award in the absence of exceptional circumstances. Ellison v. Shenango, Inc. Pension Bd., 956 F.2d 1268, 1273 (3d Cir. 1992). Finally, we have directed that a district court, when ruling on an application for attorneys' fees in an ERISA case, should articulate its analysis and Conclusions as it considers each of the five Ursic factors. See Anthuis v. Colt Indus. Operating Corp., 971 F.2d 999, 1012 (3d Cir. 1992). This appeal requires us to further discuss the standard for awarding attorneys' fees in ERISA cases.

I.

American Re-Insurance Company ("the Company") fired its comptroller, Paul F. McPherson, on July 29, 1983. McPherson's last day of work was August 12, 1983, although his salary and benefits continued through February 16, 1984. McPherson attributes his dismissal to personal differences with two senior executives.

McPherson had worked at the Company since 1959 and was a vested participant in the Employees' Pension Plan of American Re-Insurance Company ("the Plan"), a single-employer defined-benefit plan, which was qualified under 26 U.S.C. ยง 401(a). McPherson had various options for receiving his Plan benefits, among which was a lump-sum distribution of $182,837 when he turned 55 on January 8, 1987. Lump-sum distributions needed the approval of the Pension Committee of Employees' Pension Plan ...


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