Johnson v. Charps Welding & Fabricating, Inc.

Background

Trustees and fiduciaries of three jointly administered, multi-employer employee-benefit plans sued Charps Welding & Fabricating, Inc., and other defendants. The lawsuit sought an audit and recovery of alleged unpaid contributions under the Employee Retirement Income Security Act (ERISA). The court had previously granted defendants’ motion for summary judgment.

After that ruling, defendants moved for attorney’s fees and costs. They requested $2,096,063.75 in attorney’s fees and $525,517.32 in costs under ERISA’s discretionary fee provision, 29 U.S.C. § 1132(g)(1). Plaintiffs argued that another ERISA provision, § 1132(g)(2), controlled and did not authorize fees for defendants. Plaintiffs also challenged the Clerk’s taxation of costs.

Attorney’s Fees

The court held that § 1132(g)(2) applies when a fiduciary prevails and obtains a judgment in favor of an employee-benefit plan. Because defendants were non-fiduciary defendants who prevailed in an action brought under ERISA § 1145, the court held that § 1132(g)(1) governed and allowed a possible fee award to either party.

The court considered five factors identified in Lawrence v. Westerhaus: the parties’ culpability or bad faith, their ability to pay, deterrence, the benefit to ERISA participants or resolution of a significant ERISA question, and the relative merits of their positions. The court found the culpability factor neutral; found that plaintiffs could satisfy an award; and found that deterrence and the relative merits favored an award. The benefit-to-ERISA-participants factor weighed against an award. Overall, three factors favored awarding fees, and the court concluded that an award was appropriate.

The court reduced the requested fees because some work was performed by partners even though associates could have done it, an associate billing rate was too high, some hours were duplicative or insufficiently described, and the litigation had produced varying degrees of success. It reduced the cumulative hourly fee to $225 and reduced the claimed 8,779.35 hours by 50 percent. The resulting attorney’s-fee award was $987,676.88.

Costs

The Clerk had awarded defendants $149,220.96 in taxable costs, after reducing the amount requested in the bill of costs. Plaintiffs sought district-court review, challenging costs for certain deposition transcripts and copies.

The court found that plaintiffs had not shown that the Clerk’s cost judgment was inequitable. It agreed with the Clerk that $393.30 in deposition-related costs lacked sufficient explanation and that $124 in delivery fees were not taxable. The opinion states that defendants’ total cost award was therefore reduced to $525,124.02.

Disposition

The court ordered that defendants’ Motion for Attorney’s Fees and Costs was GRANTED and that plaintiffs’ Motion for Review of the Clerk’s Taxation of Costs was DENIED. Plaintiffs were ordered to pay defendants $987,676.88 in attorney’s fees and $525,124.02 in costs. The conclusion states that $149,220.02 of the costs were taxable under 28 U.S.C. § 1920, but the analysis earlier states that the taxable costs totaled $149,220.96.