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Maryland Electrical Industry Health Fund v. Mesco, Inc.

United States District Court, D. Maryland

September 16, 2014

MESCO, INC., et al., Defendants.



This Memorandum Opinion addresses plaintiffs' Motion for Attorneys' Fees and Expenses (ECF 49, the "Motion" or "Mot."). In the Motion, plaintiffs request $167, 295.47 in attorneys' fees and costs, pursuant to Section 502(g)(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1132(g)(2). See Mot. at 1-2.

With the Motion, plaintiffs have submitted a supporting memorandum (ECF 49-1, "Mem."), and an affidavit of Brian G. Esders, Esq., dated March 11, 2014 (ECF 49-2, the "Esders Affidavit" or "Aff."). Defendants have filed a brief in opposition to the Motion (ECF 60, "Opposition" or "Opp."), along with supporting exhibits (ECF 60-1 through 60-3). Plaintiffs have replied (ECF 61, "Reply"), attaching two additional exhibits (ECF 61-1 and 61-2).

No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will award plaintiffs a total of $123, 362.97 in attorneys' fees and costs.

I. Background

The facts of this case are set forth in this Court's Memorandum Opinion issued on February 28, 2014 (ECF 47), which is incorporated here. See also ECF 48 (accompanying Order); Maryland Elec. Industry Health Fund v. MESCO, Inc., 2014 WL 853237 (D. Md. Feb. 28, 2014). Nevertheless, I will provide a brief background.

Eight plaintiffs, which include seven multiemployer benefit plans (the "Plan Plaintiffs") and one labor union ("Local 24"), filed suit against defendants MESCO, Inc. ("MESCO") and Michael E. Sewell & Associates, Inc. ("Sewell"), pursuant to Section 502(a)(2) of ERISA, 29 U.S.C. § 1132(a)(2). See ECF 1 (Complaint). In their Complaint, plaintiffs contended that defendants failed to make required contributions and remittances pursuant to a collective bargaining agreement and other related agreements. See id. Specifically, plaintiffs alleged that MESCO owed them contributions, liquidated damages, and interest in the amount of $228, 810.87. See ECF 35, Exh. 1, ¶ 7. Plaintiffs also alleged that Sewell owed contributions, liquidated damages, and interest in the amount of $260, 633.92. Id. ¶ 8. Further, plaintiffs maintained that defendants operated as alter egos or as a single entity. In plaintiffs' view, this connection made each defendant jointly and severally liable for all unpaid contributions, interest, and liquidated damages, which according to plaintiffs totaled $489, 444.79.

Plaintiffs moved for summary judgment (ECF 35), which defendants opposed (ECF 44).[1] In the Memorandum Opinion of February 28, 2014, I granted summary judgment in favor of the seven Plan Plaintiffs, but denied summary judgment as to the remaining plaintiff, Local 24. See ECF 47, 48. The seven Plan Plaintiffs were awarded unpaid contributions, interest, and liquidated damages totaling $453, 615.98. See id. With regard to attorneys' fees, the Memorandum Opinion said: "Although plaintiffs also seek attorneys' fees and costs, they identify no particular amounts sought. Accordingly, I will defer ruling on the request for attorneys' fees until plaintiffs submit adequate and detailed information, along with authority in support of their particular requests." ECF 47 at 28 n.16 (citation omitted).

II. Discussion

In their Motion, plaintiffs maintain that the requested award of attorneys' fees of $160, 425 and costs of $6, 870.47 is reasonable. See Mem. at 3-6. That sum totals $167, 295.47. According to plaintiffs, the hourly rate of $225 charged by plaintiffs' counsel, and the total of 713 hours of legal work are appropriate, given the nature of this case. See Mem. at 3-4; Aff. ¶ 6. In the Opposition, defendants raise a host of objections to the requested fees. They make several general observations, including that plaintiffs knew that defendants have been "financially distressed"; that defendants "conducted no discovery, and offered minimal resistance to Plaintiffs in the prosecution of their case"; and that defendants' own "total attorneys' fees and costs were under $46, 000." See Opp. at 1. And, defendants lodge scores of specific challenges to individual time entries for which plaintiffs' counsel seek an award of attorneys' fees.

A. Legal standards

"In an ERISA action, a district court may, in its discretion, award costs and reasonable attorneys' fees to either party under 29 U.S.C. § 1132(g)(1), so long as that party has achieved some degree of success on the merits." Williams v. Metropolitan Life Ins. Co., 609 F.3d 622, 634 (4th Cir. 2010) (citations omitted). When a court has entered judgment in favor of a plaintiff seeking to recover unpaid contributions in an ERISA action, the court "shall award the plan... reasonable attorney's fees and costs of the action, to be paid by the defendant." 29 U.S.C. § 1132(g)(2)(D).[2]

"It is for the district court in the first instance to calculate an appropriate award of attorney's fees." Carroll v. Wolpoff & Abramson, 53 F.3d 626, 628 (4th Cir. 1995). In determining appropriate attorneys' fees, the court must determine the lodestar amount, defined as a "reasonable hourly rate multiplied by hours reasonably expended." Grissom v. The Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008). A plaintiff seeking attorneys' fees "must show that the number of hours for which [he or she] seeks reimbursement is reasonable and does not include hours that are excessive, redundant, or otherwise unnecessary." Travis v. Prime Lending, 2008 WL 2397330, at *4 (W.D. Va. June 12, 2008).

The lodestar is assessed according to the twelve factors articulated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), which were endorsed by the Fourth Circuit in Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 n.28 (4th Cir. 1978). The so-called " Johnson factors" are:

(1) the time and labor required; (2) the novelty and difficulty of the issues; (3) the skill requisite to perform legal services properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee or rates; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or circumstances; (8) the amount in controversy and results obtained; (9) the experience, reputation and ability of the attorneys; (10) the undesirability of the case; (11) nature and length of the professional relationship with the client; and (12) awards in similar cases.

Lopez v. Lawns R' Us, 2008 WL 2227353, at *5 (D. Md. May 23, 2008) (citing Johnson, 488 F.2d at 717-19).

Notably, recent case law makes clear that although the lodestar calculation may be informed by the Johnson factors, those factors should not supplant the lodestar method. Chief Judge Chasanow has explained:

The United States Supreme Court recently appeared to question the approach adopted by the United States Court of Appeals for the Fourth Circuit in Kimbrell's -originally set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)-describing it as an "alternative" to the lodestar method and explaining that it provides too little guidance for district courts and places too great of an emphasis on subjective considerations. See Perdue v. Kenny A., 559 U.S. 542, 551-52 (2010) ("[T]he lodestar method is readily administrable, and unlike the Johnson approach, the lodestar calculation is objective, and thus cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results." (internal citations omitted)). Nonetheless, "the Johnson factors, as opposed to the Johnson method, are still relevant in informing the court's determination of a reasonable fee and a reasonable hourly rate"; "[ Perdue ] cautions against using a strict Johnson approach as the primary basis for determining reasonable attorneys' fees, but nowhere calls into question the idea of using relevant Johnson factors in helping to come to a reasonable fee." Spencer v. Cent. Servs., LLC, No. CCB-10-3469, 2012 WL 142978, at **5-6 (D. Md. Jan. 13, 2012) (internal quotations marks and citations omitted).

Trustees of Nat. Automatic Sprinkler Industry Welfare Fund v. Westland Fire Protection, Inc., 2014 WL 824121, at *3 n.2 (D. Md. Feb. 28, 2014).

B. General considerations and Johnson factors

In the Motion, plaintiffs raise a number of arguments pertinent to the Johnson factors and, more generally, to the reasonableness of the sum that they seek. Regarding the difficulty of the issues in this case, plaintiffs assert, inter alia, that it was necessary to review "numerous records... to establish [an] alter-ego relationship between the Defendants." Mem. at 4-5. With respect to the level of attorney skill required, plaintiffs assert that ERISA contribution litigation is "a specialized area of the law, " and state that "[t]he attorneys in this case have substantial experience in the collection of delinquent contributions and collection of withdrawal liability for ERISA plaintiffs." Id. at 5. Plaintiffs add that counsel here "specialize in the representation of employee benefit plans, " and their "experience and ability justifies the award of the actual attorneys' fees charged." Id. However, plaintiffs' counsel concede that this suit did not preclude them from other employment, that no particular time limitations existed, and that ERISA contribution suits are "not generally considered undesirable." Id. at 5-6.

For their part, defendants point to only two Johnson factors that, in their view, are the "[m]ost [a]pplicable" to this case. See Opp. at 9-10. First, defendants maintain that, because plaintiffs are represented by a firm that is "long established and well regarded [in] representing unions and benefit funds, " any "novel or difficult issues" are ones "with which the firm is experienced and familiar." Id. at 9. Second, with regard to the "[t]ime involved and results obtained, " defendants acknowledge that plaintiffs' counsel obtained a judgment of $453, 615.90.[3] Opp. at 10. However, defendants also note that they did not challenge plaintiffs' calculation of the appropriate judgment, and add that the parties have settled a dispute concerning "one project involved in the case that was bonded." Id.

In my view, the Johnson factors, when viewed in their entirety, do not counsel strongly in favor of an enhancement or a reduction of attorneys' fees due under a lodestar calculation. Nevertheless, consistent with the Supreme Court's guidance in Perdue v. Kenny A., 559 U.S. 542, I will take the Johnson factors into consideration, including in connection with the specific objections to the lodestar calculation that defendants have raised.

C. Hourly rate

Regarding the lodestar calculation, I turn first to the issue of the hourly rate claimed by plaintiffs' counsel. Plaintiffs assert: "At all times relevant to this case, Plaintiffs were billed at the rate of $225.00 per hour for the services of an attorney." Aff. ¶ 5.

With respect to a requested hourly rate, the Fourth Circuit follows the "locality rule, " by which "[t]he community in which the court sits is the first place to look to in evaluating the prevailing market rate.'" Montcalm Pub. Corp. v. Commonwealth of Virginia, 199 F.3d 168, 173 (4th Cir. 1999) (citation omitted). Ordinarily, "[e]vidence of the prevailing market rate... takes the form of affidavits from other counsel attesting to their rates or the prevailing market rate." CoStar Group, Inc. v. LoopNet, Inc., 106 F.Supp.2d 780, 788 (D. Md. 2000). However, the U.S. District Court for the District of Maryland has adopted Rules and Guidelines for Determining Attorneys' Fees in Certain Cases (the "Guidelines"), which are located in Appendix B of the Local Rules of this Court. "In the District of Maryland, this market knowledge is embedded in the Guidelines." Gonzalez v. Caron, 2011 WL 3886979, at *2 (D. Md. Sept. 2, 2011).

Defendants do not specify any particular reductions in connection with their challenge to the rates requested by plaintiffs' counsel. See Opp. at 8. Nevertheless, defendants maintain that a reduction in the rates is warranted, in light of plaintiffs' failure to provide sufficient evidence to justify the rates sought. See id. As defendants note, in Saman v. LBDP, Inc., 2013 WL 6410846 (D. Md. Dec. 6, 2013), the court stated that a party must "produce satisfactory specific evidence of the prevailing market rates in the relevant community for the type of work for which [they] seek[] an award.'" Id. at *3 (quoting Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990)). Such evidence includes "affidavits of other local lawyers who are familiar both with the skills of the fee applicants and more generally with the type of work in the relevant community." Robinson v. Equifax Info. Servs., 560 F.3d 235, 245 (4th Cir. 2009). However, a party's "failure to include affidavits from independent counsel is not fatal, " as "the court may rely on its own knowledge of the market, '" including by referring to the Guidelines. Gonzalez, 2011 WL 3886979, at *2 (citation omitted). Indeed, in Saman, 2013 WL 6410846, at *3, the district court's remedy for the failure to provide such affidavits was a modest reduction of one attorney's hourly rate from the $300 requested to $275, which still fell within the Guidelines range for attorneys with his level of experience.

Appendix B of the Guidelines sets forth advisory fee ranges for attorneys based on years of experience. The rates "are intended solely to provide practical guidance to lawyers and judges when requesting, challenging and awarding fees, " and "may serve to make the fee petition less onerous by narrowing the debate over the range of a reasonable hourly rate in many cases." Guidelines § 3 n.6. However, the fee ranges are not binding on the Court. Id .; see also Thomas v. Smith, Dean & Assocs., Inc., 2011 WL 3567043, at *2 (D. Md. Aug. 10, 2011) (stating that the Guidelines rates "are neither binding nor definitive").

Although "the Guidelines are not binding, generally this Court presumes that a rate is reasonable if it falls within these ranges." Gonzalez, 2011 WL 3886979, at *2. Pursuant to the version of the Guidelines in effect as of July 1, 2011, which governed at the time ...

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