United States District Court, D. Maryland
CATHERINE C. BLAKE, District Judge.
Plaintiff Ronald Pfieffer filed this ERISA action claiming that defendant Schmidt Baking Co., Inc. ("Schmidt"), his former employer, was improperly offsetting the pension payments he was due under the company's pension plan with the pension benefits he was receiving from his union. After a year of litigation, Schmidt reversed its position on the viability of the offset, began paying pension benefits without the offset, and paid Pfieffer all of the back pension he claimed he was owed.
The parties then began a protracted dispute regarding attorneys' fees. Pfieffer filed a motion for attorneys' fees on March 1, 2013. He sought an award of $61, 590.00 in fees and $361.72 in costs. He also sought a 50% enhancement of fees, for a total fee award of $92, 385.00. In its opposition filed October 8, 2013, Schmidt argued against any award of attorneys' fees, claiming that litigation with its third-party service provider-and not Pfieffer's lawsuit-was the substantial cause of its decision to provide relief. Rather than file a reply, on October 23, 2013, Pfieffer filed a motion requesting, among other things, court consideration of confidential settlement communications and discovery. On February 25, 2014, the court determined Pfieffer's lawsuit was a substantial cause of Schmidt's decision to provide relief. Consequently, the court did not need to consider confidential settlement communications or order discovery. Instead, the court ordered Pfieffer to file a reply brief in support of his motion for attorneys' fees within fourteen days. Pfieffer filed his reply on March 11, 2014, indicating that he now seeks an award of $40, 510.50 in fees and $361.72 in costs. He continues to seek a 50% enhancement of fees, for a total fee award of $60, 765.75.
The motion for attorneys' fees is finally ripe. The parties have fully briefed the issues, and no oral argument is necessary. See Local R. 105.6. For the reasons stated below, attorneys' fees in the amount of $35, 388.00 and costs in the amount of $361.72 will be awarded. The court will not order any enhancement of fees.
A. Entitlement to Fee Award
"A district court in its discretion may allow a reasonable attorney's fee and costs of action to either party in an ERISA action, " Plasterers' Local Union No. 96 Pension Plan v. Pepper, 663 F.3d 210, 221-22 (4th Cir. 2011) (citation and internal quotation marks omitted), so long the party (1) "achieved some degree of success on the merits'" and (2) is entitled to an award under the five Quesinberry factors. Williams v. Metro. Life Ins. Co., 609 F.3d 622, 634-35 (4th Cir. 2010) (citation omitted); see also Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d 1017, 1029 (4th Cir. 1993) (en banc). The Quesinberry factors, which are "general guidelines' rather than a rigid test, '" include "(1) [the] degree of opposing parties' culpability or bad faith; (2) [the] ability of opposing parties to satisfy an award of attorneys' fees; (3) whether an award of attorneys' fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys' fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the parties' positions." Williams, 609 F.3d at 635-36 (quoting Quesinberry, 987 F.2d at 1029).
Pfieffer has achieved at least some degree of success on the merits. As determined in the court's February 25, 2014, Memorandum opinion, Pfieffer's lawsuit was a substantial cause of Schmidt's decision to provide relief. Moreover, Pfieffer obtained all the relief he sought in his complaint; indeed, Schmidt reversed its position on the union offset provision, and paid him all of the back pension he claimed he was owed plus interest. Cf. Flores v. Life Ins. Co. of N. Am., 770 F.Supp.2d 768, 775 (D. Md. 2011) (citation and internal quotation marks omitted) (suggesting that the plaintiff achieves at least some degree of success on the merits when his settlement amounts to "the very prayer for relief" sought in the complaint).
Next, the court agrees with Pfieffer that the Quesinberry factors favor a fee award. First, Schmidt evidenced some culpability by denying benefits despite the fact that it had not reviewed-or even had in its possession-the relevant pension plan documents. Schmidt explains that it believed a "union offset provision" was included in Pfieffer's pension plan because a different pension plan included the provision. Upon review of discovery produced during litigation with its third-party service provider, however, it determined the relevant pension plan documents had been destroyed in a fire at Schmidt's facility. In its October 5, 2012, letter to Pfieffer, it stated:
We have just completed the review of the last documents produced by the Plan's former service provider. As a result of this review, we determined that the previous offset of your Plan benefit, although logical to prevent pension payment "double-dipping, " and although intended by the relevant parties, is not reflected in the various files and documents to the extent we would prefer.
(Oct. 5, 2012, Letter to Pfieffer, ECF No. 41-11.) Thus, it appears that Schmidt withheld Pfieffer's benefits based only on its belief that his pension plan included the union offset provision. Cf. Wheeler v. Dynamic Eng'g, Inc., 62 F.3d 634, 641 (4th Cir. 1995) (noting that the district court had found Dynamic Engineering, Inc. acted in bad faith when it "failed to determine whether Wheeler might be covered under the 1993 plan, examining coverage only under the 1994 Key Care II plan"); see also Feldman's Med. Ctr. Pharmacy, Inc. v. CareFirst, Inc., 898 F.Supp.2d 883, 908 (D. Md. 2012) (citations and internal quotation marks omitted) (stating that "a party can be found culpable where a plan's decision is discernibly against the weight of the evidence... or where a plan administrator performs a cursory, inadequate investigation of a claim"), aff'd, 541 Fed.App'x 322 (4th Cir. 2013). Second, Schmidt concedes that it has the resources to satisfy an award of fees. Third, having found some culpability on the part of Schmidt, the court is satisfied that an award of attorneys' fees would deter other employers from denying benefits prior to a thorough review of the relevant pension plan documents. The court cannot conclude, however, that the fourth factor weighs definitively in favor of a fee award. Although Pfieffer's lawsuit may incidentally benefit other participants in the pension plan, this was not the apparent goal of the litigation. Cf. Ferguson v. United of Omaha Life Ins. Co., ___ F.Supp.2d ___, No. WMN-12-1035, 2014 WL 956886, at *14 (D. Md. 2014). The fifth factor favors a fee award because, as stated above, Pfieffer received all the relief sought in his complaint. See Feldman's, 898 F.Supp.2d at 910-11. The court is satisfied that, on balance, the Quesinberry factors support an award of fees. Thus, in sum, because they achieved some degree of success on the merits and are entitled to an award under the Quesinberry factors, plaintiff's counsel may recover reasonable fees and costs.
B. Amount of Fees
Having concluded that attorneys' fees are appropriate in this case, the court decides the amount of fees to award by calculating the lodestar, or "the number of hours reasonably expended on the litigation times a reasonable hourly rate." Blum v. Stenson, 465 U.S. 886, 888 (1984); see also Int'l Painters and Allied Trades Indus. Pension Fund v. DLC Corp., Inc., No. WDQ-11-1938, 2012 WL 1229491, at *7 (D. Md. Apr. 11, 2012). The court will use the following hourly rates, which are unopposed and fall within accepted rates for lawyers with comparable experience: $300.00 for Victoria L. Grace, $190.00 for James A. H. Corley, $350.00 for Adam M. Spence, and $190.00 for Maya G. Yacoub. See Local R., App. B: Rules and Guidelines for Determining Attorneys' Fees in Certain Cases.
Turning to the number of hours claimed, Schmidt puts forth eight arguments as to why certain hours were not reasonably expended and, thus, must be deducted from the lodestar calculation. The court will address each argument in turn. First, Schmidt opposes hours claimed for the administrative appeal. Because Pfieffer concedes in his reply that those hours are not ...