Wessberg v. Unum Life Insurance Company of America

Background

Plaintiff Ann D. Wessberg brought this action against Defendant Unum Life Insurance Company of America ('Unum') under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., challenging Unum's termination of her long-term disability benefits after she was diagnosed with bilateral invasive breast cancer. In July 2024, the court ruled on cross-motions for judgment on the administrative record — a procedural vehicle used in ERISA cases where the court reviews the record that was before the plan administrator — granting Wessberg's motion and denying Unum's, concluding that Unum improperly terminated her benefits. The court ordered reinstatement of benefits, payment of retroactive benefits, and an award of reasonable attorney's fees, costs, and prejudgment interest. The parties then met and conferred, reached agreement on the dollar amount of retroactive benefits and interest, but could not agree on attorney's fees or costs, leading to this opinion.

Benefits Owed and Prejudgment Interest

The parties agreed that Unum owed Wessberg retroactive benefits of $663,234.14 for the period from September 8, 2020, to July 16, 2024, plus prejudgment interest of $77,851.17, for a total of $741,085.31. Because this was undisputed, the court simply ordered payment of those amounts.

Attorney's Fees — Legal Framework

Under ERISA, a prevailing party may recover reasonable attorney's fees. The Eighth Circuit uses the 'lodestar' method: multiplying the number of hours reasonably expended by a reasonable hourly rate. See Beckler v. Rent Recovery Sols., LLC, 83 F.4th 693, 695 (8th Cir. 2023). Hours that are 'excessive, redundant, or otherwise unnecessary' should be excluded. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The party seeking fees bears the burden of supporting its request with documentation.

Wessberg sought $445,488.75 in fees for approximately 1,068 total hours across three attorneys — Elizabeth Wright, Michael Rothman, and Christopher Daniels — and two paralegals from the Parker Daniels Kibort LLC (PDK) firm. Unum argued fees should be cut to $93,603.59.

Hourly Rates

Elizabeth Wright billed at $390/hour before May 3, 2024, and $200/hour thereafter (after leaving her prior firm). The court found $390/hour reasonable, noting that recent District of Minnesota ERISA cases have awarded $225–$400/hour, that Wright has practiced since 1987 with extensive medical and insurance litigation experience, and that a comparator attorney attested Wright's rate was 'probably a bit low.' The $200/hour post-May 2024 rate was also approved.

Michael Rothman billed at $510/$585/hour in 2021, $630/hour in 2022–2023, and $675/hour in 2024. The court found his rates 'slightly elevated' given prevailing rates in the area, and reduced all rates billed at $585/hour or higher to $550/hour, finding that rate appropriately reflected both the market and Rothman's unique background (including service as Minnesota Commissioner of Commerce and a presidential nomination to a national insurance regulatory board).

Christopher Daniels billed at $475/hour. The court found this rate reasonable given his practice since 1988 across complex commercial litigation and insurance matters.

Unum's proposed across-the-board rate of $375/hour for all three attorneys was rejected.

Hours Expended — Unsuccessful Motions and Arguments

Unum sought a 215.8-hour reduction for time spent on unsuccessful motions: Motions to Expand the Administrative Record and to Compel Discovery, and an attempt to obtain a bench trial rather than motions practice. The court applied the principle that unrelated unsuccessful claims should not be compensated, but that claims sharing a common core of facts with successful ones may be. The court found these unsuccessful motions were not so unwarranted as to justify a 100% reduction, but found spending that volume of hours on them 'slightly unreasonable' given that ERISA de novo review is generally limited to the administrative record. The court applied a 50% reduction to hours in this category: PDK's 162.8 hours were cut to 81.4 hours, and Rothman's 53 hours (totaling $33,138 in fees) were reduced by half, cutting $16,569 from his fees.

Hours Expended — Block-Billing

Unum requested a 15% reduction for block-billing (combining multiple task descriptions in a single time entry) in at least 35 entries exceeding four hours. The court declined this reduction. While noting block-billing is disfavored and the court would prefer attorneys avoid it, it found the billing records sufficiently specific to communicate what was done and its connection to the litigation.

Hours Expended — Excessive Billing

Research (315 hours): Unum requested a 150-hour reduction to Wright's research time. The court declined, finding the topics researched were relevant and complex, and noting it had already accounted for research related to unsuccessful motions through the 50% reduction above. The court also noted that Unum's argument that counsel was inexperienced (justifying rate reduction) was in tension with arguing counsel should have researched less.

Drafting and Preparing Pleadings and Motions: Unum challenged numerous categories of hours including 438 hours preparing the cross-motions for judgment and 112.65 hours on post-order activities, and requested a 45% reduction. The court found the case was 'very fact-intensive,' involving complicated medical diagnoses and a 4,860-page administrative record, and that counsel provided detailed justification for the hours. However, the court agreed that some hours — particularly for routine Rule 26(f) materials, settlement discussions, the cross-motions, and post-order work — were elevated compared to comparable ERISA cases in this district. Rather than a 45% reduction, the court applied a 15% reduction to the total fee award at the end of its analysis.

Overlawyering: Unum argued that using three attorneys from two firms created redundant fees. The court disagreed. It noted that Wright handled the vast majority of work at the lowest billing rate, demonstrating billing judgment; that internal communications totaling approximately 37.5 hours over two-and-a-half years of litigation were not unreasonable; and that Daniels typically did not charge for conferences and email review. No reduction was applied.

Hours Expended — Administrative and Clerical Tasks

Unum argued that 16 hours of clerical tasks (filing, docketing, scheduling, ordering transcripts, monitoring emails) were billed at attorney and paralegal rates and should be excluded or reduced. The court agreed in part. It declined to reduce fees for reviewing and summarizing the administrative record given the record's complexity and length. However, it applied a paralegal rate of $185/hour to the 16 clerical hours, resulting in a reduction of $4,005 from Rothman's fees and $1,647.50 from PDK's fees, for a total reduction of $5,652.50.

Fee Calculation Summary

After applying all adjustments — reduced Rothman rates, 50% cut on unsuccessful motion hours, paralegal rate for clerical tasks — the court reached a subtotal of $369,929.75. It then applied a 15% across-the-board reduction for excessive and duplicative drafting and motion time, yielding a final attorney's fee award of $314,440.29. The court broke this down as: Wright entitled to $203,204.40; Daniels entitled to $8,044.19; Rothman entitled to $88,490.95; PDK paralegals entitled to $10,818.80 (Siegel) and $3,881.95 (Rice).

Costs

Wessberg sought $9,797.09 in costs; Unum argued for only $430.

- Computer-aided legal research ($2,158.18 from Westlaw/LexisNexis/PACER): Excluded. Courts in this district have not permitted such costs in addition to attorney's fees, and Wessberg did not demonstrate that separately billing for computer research is the prevailing community practice. Notably, Rothman himself excluded Lexis costs from his own submission.

- Costs related to unsuccessful motions ($2,268.15): Allowed. The court had already reduced attorney's fees for this work and declined to impose a further reduction on the costs side.

- Postage, courier, and parking ($132.61): Excluded. Such expenses are not recoverable under ERISA, which limits costs to those specified in 28 U.S.C. §§ 1821 and 1920.

- Data storage costs ($4,807.15 for one gigabyte at $250/month): Excluded. Counsel provided no explanation for why one gigabyte of storage (which can hold approximately 678,000 pages of text) was reasonable or necessary given a record of 4,359 pages.

Recoverable costs: $2,698.15.

Order

The court ordered Unum to pay Wessberg: (1) retroactive benefits of $663,234.14 plus prejudgment interest of $77,851.17, totaling $741,085.31; (2) attorney's fees of $314,440.29; and (3) costs of $2,698.15. Judgment was entered accordingly.