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Local Union 98 v. RBG Services, LLC

United States District Court, Third Circuit

August 21, 2013

THE LOCAL UNION 98 et al., Plaintiffs,
v.
RGB SERVICES, LLC, Defendants.

MEMORANDUM OPINION

TIMOTHY R. RICE U.S. MAGISTRATE JUDGE

Plaintiffs, the Local Union 98 International Brotherhood of Electrical Workers and the individual trustees of five multi-employer benefit funds (collectively “Plaintiffs”), were the prevailing parties in a lawsuit filed against Defendants RGB Services, LLC (“RGB”) and Michael Metsikas, owner and principal of RGB (collectively “Defendants”), for violating the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”). They now seek an award of $81, 542.56 in attorney’s fees and $10, 700.36 in costs pursuant to ERISA. See Pls.’ Pet. for Attny’s Fee & Litg. Costs (“Pls.’ Pet.”) (doc. 81). Defendants object to the petition.[1] See Defs.’ 1st Obj. (doc. 73); Defs.’ 2nd Obj. (doc. 86).

I will grant in part, and deny in part, Plaintiffs’ petition requesting attorney’s fees and costs, and award $77, 280.85 in attorney’s fees and $10, 592.60 in costs.

I. Attorney’s Fees Under ERISA

I have discretion to “allow a reasonable attorney’s fee and costs” to a party who has achieved some degree of success in a case. See 29 U.S.C. § 1132(g)(1); Hardt v. Reliance Standard Life Ins. Co., 130 S.Ct. 2149, 2157 (2010). The following policy factors guide this determination:

(1) the offending parties’ culpability or bad faith; (2) the ability of the offending parties to satisfy an award of attorneys’ fees; (3) the deter[r]ent 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.

Nat’l Sec. Sys., Inc. v. Iola, 700 F.3d 65, 103-04 (3d Cir. 2012) cert. denied, 133 S.Ct. 1812 (2013) (quoting Ursic v. Bethlehem Mines, 719 F.2d 670, 673 (3d Cir. 1983)). These factors “‘are not requirements in the sense that a party must demonstrate all of them . . ., [rather] they are elements a court must consider in exercising its discretion.’” In re Unisys Corp. Retiree Med. Benefits ERISA Litig., 579 F.3d 220, 239 (3d Cir. 2009) (quoting Fields v. Thompson Printing Co., 363 F.3d 259, 275 (3d Cir. 2004)).

Here, Defendants acted in bad faith in breaching the commercial agreements with Plaintiffs by failing to: (a) make fund contributions; and (b) participate in the payroll compliance review to collect delinquent contributions. This is the second lawsuit Plaintiffs filed in an attempt to collect the delinquent contributions. The union funds, for which Plaintiffs are trustees, would have received a benefit had Defendants contributed to the funds, as required. Although Defendant RGB filed for bankruptcy, see Mot. for Reconsideration & Stay (doc. 77), Defendant Metsikas remains personally liable for the judgment through the piercing the corporate veil doctrine. See Findings of Fact, Conclusions of Law (doc. 68). Defendants do not contend Metsikas is unable to pay the requested amount. Plaintiffs successfully asserted their claims against both Defendants. Furthermore, awarding fees would deter Defendants, and others, from future unlawful violations of ERISA. Thus, awarding fees and costs pursuant to ERISA is appropriate.

II. Calculation of Attorney’s Fees

A party seeking attorney’s fees and costs must submit evidence supporting the hours worked and rates claimed. United Auto. Workers Local 259 Soc. Sec. Dept., v. Metro Auto Ctr., 501 F.3d 283, 291 (3d Cir. 2007). Specificity is crucial in requesting, challenging, and granting attorney’s fees. Id. A fee petition must be accompanied by “‘fairly definite information as to hours devoted to various general activities’” and the attorney’s hours expended. Id. (quoting Evans v. Port Auth. of N.Y. & N.J., 273 F.3d 346, 361 (3d Cir. 2001)). “‘Where the documentation of hours is inadequate, the district court may reduce the award accordingly.’” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).

Once a reasonable amount of hours is determined, I use a lodestar approach by multiplying those hours by a reasonable hourly rate. Hensley, 461 U.S. at 433; Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 300, 310 (3d Cir. 2008). Generally, a reasonable hourly rate is calculated according to the prevailing market rates in the community. Washington v. Phila. Ct. of Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996). The party seeking attorney’s fees must produce sufficient evidence of what constitutes a reasonable market rate for the character and complexity of the legal services rendered. Id.; see also Skretvedt v. E.I. Du Pont De Nemours Co., 262 F.Supp.2d 366, 377 (D. Del. 2003) (“It is the movant’s burden under 29 U.S.C. § 1132(g) to establish the reasonableness of the rate sought, particularly since ERISA matters involve litigation that varies along a continuum from the very simple to the extremely complex.”) (citation and quotation marks omitted).

I “may not sua sponte reduce a § 502(g) request for attorneys’ fees.” Bell v. United Princeton Props., Inc., 884 F.2d 713, 719 (3d Cir. 1989). The party opposing the fee petition may challenge, by affidavit or brief with sufficient specificity, the reasonableness of the requested fee. Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). Once objections are raised, I maintain discretion to adjust the fee award in light of those objections. Id.

Excessive, redundant, and unnecessary hours should be excluded. Hensley, 461 U.S. at 434 (“Hours that are not properly billed to one’s client also are not properly billed to one’s adversary pursuant to statutory authority.”) (emphasis omitted). Fee petitions must “be subject to a thorough and searching analysis, ” requiring courts reviewing them to “go line, by line through the billing records supporting the fee request.” Evans, 273 F.3d at 362 (internal question marks omitted).

Plaintiffs’ counsel claims it expended the following hours at the specified rates: (1) Attorney Steven Marino, 331.38 hours at $225; and (2) Legal Assistant David McMurray, 82.13 hours at $85. See Pls.’ Pet. at 3-4. The lodestar amount totals $81, 542.56. Id. Plaintiffs’ counsel ...


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