Grandson v. Western Lake Superior Piping Industry Pension Plan

Background

Grandson brought an action under the Employee Retirement Income Security Act (ERISA) seeking pension benefits and alleging breach of fiduciary duty. In an earlier order, the court granted Grandson summary judgment on his benefits claim and denied the defendants’ summary-judgment motion. The court concluded that the trustees abused their discretion by denying Grandson an actuarial increase from his normal retirement benefit. It found that the defendants’ interpretation of the pension plan conflicted with the plan’s plain language, made the definition of “Disqualifying Employment” meaningless, and was inconsistent with the plan’s objectives and ERISA’s purpose. Because Grandson prevailed on the benefits claim, the court did not reach the merits of his fiduciary-duty claim.

Grandson then moved for attorneys’ fees and costs under 29 U.S.C. § 1132(g)(1). He requested $135,700.00 in attorneys’ fees for Denise Tataryn and Jody Galman and $1,334.05 in costs. The defendants opposed the request and argued that Grandson was not entitled to fees or costs and, alternatively, that the requested fees should be reduced for unnecessary and excessive work.

Whether Fees and Costs Were Appropriate

The court explained that an ERISA court may award reasonable attorneys’ fees and costs to either party. A fee applicant must show some degree of success on the merits, but need not satisfy the broader requirement of being a prevailing party. The court found that Grandson had prevailed because he succeeded entirely on his benefits-due claim.

The court considered five nonexclusive factors: the defendants’ culpability or bad faith; their ability to pay; whether an award would deter similar conduct; whether the case benefited other plan participants or resolved a significant ERISA question; and the relative merits of the parties’ positions.

The culpability factor strongly favored an award. The court had found that the defendants’ benefits denial contradicted the plan’s plain language, and it noted that the defendants had several opportunities to correct their position during the administrative process and litigation. The court did not find that the defendants generally acted in bad faith, but it said their administrative-exhaustion argument came close to bad faith because they had previously represented that Grandson had adequately exhausted his administrative benefits.

The defendants’ ability to pay favored an award because they offered no evidence that they could not satisfy one. Deterrence also favored an award because fees could discourage fiduciaries from maintaining an incorrect benefits position after receiving opportunities to correct it. The factor concerning a significant ERISA question or benefit to all participants was neutral because the case concerned language specific to Grandson’s pension plan and it was unclear how many other participants would be affected. The relative-merits factor favored Grandson because he won his benefits claim despite the deferential standard applied to the trustees’ decision.

Reasonable Fees

The court calculated reasonable fees using the lodestar method, which multiplies the reasonable hours worked by reasonable hourly rates. It excluded or reduced some time entries. The court reduced travel time for several hearings and a deposition, excluded 0.2 hours for imprecise entries related to the amended complaint, reduced summary-judgment opposition and reply time because the briefing duplicated other work, and excluded 2.3 hours of entries that did not specifically describe the work performed. The court did not reduce time spent responding to the defendants’ motion to dismiss, preparing the amended complaint, conducting discovery, or preparing the fee motion. It approved compensation for 271.8 hours: 251.6 hours for Tataryn and 20.2 hours for Galman.

Although Grandson’s lawyers requested hourly rates of $450 for Tataryn and $400 for Galman, the court found that reasonable rates in the district were $400 and $350, respectively. Applying those rates to the approved hours produced a lodestar of $107,710.00. The court declined to reduce that amount because Grandson achieved a total victory, the case involved complex plan-interpretation issues, and the defendants’ conduct increased the time and labor required.

Costs and Disposition

The court found the requested $1,334.05 in costs for court fees, service of process, and deposition costs reasonable and supported by the record. Judge Laura M. Provinzino therefore granted Grandson’s Motion for Attorneys’ Fees and Costs and awarded him $107,710.00 in attorneys’ fees and $1,334.05 in costs. The order directed that judgment be entered accordingly.