MINNEAPOLIS PERSONAL INJURY ATTORNEY  
attorney Michael E. Douglas Attorney at Law
  Personal Injury Attorney
  St. Paul Workers Compensation Lawyer work comp attorney
 > About Me
   :: My Commitment
   :: Our Community
   
 > Legal Practice Areas
  twin cities comsumer lawPersonal Injury
   :: Traffic Accidents
   :: Medical Malpractice
   :: Social Security Disability
   :: Premises Liability
   :: Wrongful Death
   :: Dog Bite
   :: Back/Spinal/Neck Injuries
   :: Whiplash
   :: Defective Medical Devices
   :: Defective Drugs
  Minnesota Personal InjuryWorkers Compensation
  St. Paul personal injuryConsumer Law
   :: Debt Collection
   :: Repossessions
   :: Foreclosures
   :: Loan, Credit, Banking
   :: Arbitration Agreements
   :: Deception and Fraud
   :: Auto Fraud / Lemon Law
   :: Warranties
   :: Predatory Lending
   
 > Contact Us
   :: Contact Us
 

Law Offices of Michael E. Douglas
P.O. Box 251551
Woodbury, Minnesota 55125-6551
   

 Saint Paul Lawyer
 
 mdouglas@injurylawtwincities.com

 

Eisenrich v. Mpls. Retail Meat Cutters and Food Handlers Pension Plan: US Distrct Court : ERISA | FEES - pre-judgment interest rate on back pension payments; fees award

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Thomas Eisenrich,
Plaintiff,
Civ. No. 07-1845 (RHK/JSM)
MEMORANDUM OPINION AND
ORDER FOR JUDGMENT
v.
Minneapolis Retail Meat Cutters and Food
Handlers Pension Plan,
Defendant.
Robert J. Hajek, Donald L. Beauclaire, Hajek, Meyer & Beauclaire, PLLC, Minneapolis,
Minnesota, for Plaintiff.
Carl S. Wosmek, David S. Anderson, Amy L. Court, McGrann Shea Anderson Carnival
Straughn & Lamb, Chartered, Minneapolis, Minnesota, for Defendant.
This matter is before the Court pursuant to its April 3, 2008 Order granting
summary judgment sua sponte for Plaintiff. In that Order, the Court directed the parties
to address the amount of the judgment to be entered in this case. For the reasons set forth
below, the Court will direct the entry of judgment in the amount of ,471.34.
The background facts in this case are set forth in the Courts April 3, 2008 Order
and, for the sake of brevity, will not be repeated here. See Eisenrich v. Minneapolis
Retail Meat Cutters & Food Handlers Pension Plan, __ F. Supp. 2d __, 2008 WL 906795
(D. Minn. Apr. 3, 2008). Pursuant to that Order, Plaintiff is entitled to the resumption of
-2-
his monthly pension payments in the amount of ,601.35. The parties were further
directed to submit briefs addressing the amount of the judgment to which Plaintiff is
entitled for pension payments that were wrongly withheld, as well as any request for
attorneys fees. Plaintiff now requests that the Court enter judgment in the amount of
1,176.47, comprising ,837.80 in back pension payments, ,531.38 in prejudgment
interest, and attorneys fees and costs totaling ,807.29. Defendant agrees
that Plaintiff is entitled to ,837.80 for back pension payments, but disputes Plaintiffs
calculation of pre-judgment interest and argues that fees and costs are unwarranted or,
alternatively, should be reduced. Accordingly, the Court need only address below prejudgment
interest and attorneys fees and costs.
I. Pre-judgment interest
Defendant concedes that Plaintiff is entitled to an award of pre-judgment interest
on the ,837.80 due for back pension payments (see Def. Mem. at 3); it merely disputes
the amount of such interest. See Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1331 (8th
Cir. 1995) (award of pre-judgment interest in ERISA case is discretionary with district
court). Plaintiff seeks interest totaling ,531.38, a figure calculated using Minnesotas
state-judgment interest rate. (See Pl. Mem. at 5.) Defendant argues that the calculation
of pre-judgment interest is governed by federal law in ERISA cases and that 28 U.S.C.
1961 sets forth the proper interest rate. (See Def. Mem. at 3-4.) The Court agrees with
Defendant, see Sheehan v. Guardian Life Ins. Co., 372 F.3d 962, 969 (8th Cir. 2004)
1 This amount is calculated in Exhibit C to the Affidavit of Amy Court (Doc. No. 51),
with which the Court agrees.
-3-
(affirming use of 1961 to calculate pre-judgment interest in ERISA case), and therefore
concludes that Plaintiff is entitled to pre-judgment interest in the amount of ,424.14.1
II. Attorneys fees and costs
Plaintiff next seeks ,807.29 in attorneys fees and costs, comprising ,310 in
fees for 277.7 hours expended on this matter and 7.29 in miscellaneous costs.
Defendants argue that an award of fees and costs is unwarranted and, in the event the
Court makes such an award, the amount sought by Plaintiff must be reduced. The Court
agrees with only the latter argument.
A. Plaintiff is entitled to an award of fees
Both parties correctly note that the decision whether to award fees to a prevailing
party in an ERISA case is entrusted to the discretion of the district court. See 29 U.S.C.
1132(g)(1); Martin v. Ark. Blue Cross & Blue Shield, 299 F.3d 966, 969 (8th Cir.
2002). In exercising that discretion, the Eighth Circuit has set forth five factors to be
considered: (1) the degree of culpability or bad faith of the party from whom fees are
sought; (2) that partys ability to pay; (3) whether an award of fees against that party
might have a future deterrent effect under similar circumstances; (4) whether the party
requesting fees sought to benefit all participants and beneficiaries of the plan or to resolve
a significant legal question regarding ERISA itself; and (5) the relative merits of the
parties positions. Id. at 969 n.4 (citing Lawrence v. Westerhaus, 749 F.2d 494, 496 (8th
-4-
Cir. 1984)). These factors, however, are by no means exclusive or to be mechanically
applied. Id. at 972 (citation omitted). Rather, they are general guidelines to be used,
along with other relevant considerations, when determining whether a fee award is
appropriate. Id. In weighing these factors, the Court must remain cognizant that ERISA
is remedial legislation which should be liberally construed to effectuate Congressional
intent to protect employee participants in employee benefit plans. Starr v. Metro Sys.,
Inc., 461 F.3d 1036, 1040 (8th Cir. 2006). Accordingly, a prevailing ERISA plaintiff
rarely fails to receive fees. Id. at 1041 (emphasis added).
Having considered the Westerhaus factors, the Court determines that an award of
fees is appropriate here. First, the Court finds that Defendants position in this matter
patently lacked merit and was contrary to both ERISA and the terms of the Plan. The
relative merits of the parties positions, therefore, clearly weighs in Plaintiffs favor.
Moreover, Defendants insistence on its untenable (and ultimately unsuccessful) position
smacks of bad faith. In reaching that conclusion, the Court does not view Defendants
litigation posture in a vacuum; the Court strongly suspects that Defendants position was
borne of the fact that Plaintiff sued Defendant a few short years ago, after it denied him
the right to have a court reporter present at a prior arbitration hearing. That lawsuit
resulted in a judgment in Plaintiffs favor and an award of ,000 in attorneys fees. In
the Courts view, the course of conduct here Defendants long delay before suspending
Plaintiffs pension benefits, when it was (or should have been) aware of Plaintiffs
purportedly competing work, followed by Defendant adopting an indefensible reading
2 Defendant argues that Plaintiff should not be awarded fees because such an award will
be paid out of the Plans assets. (See Def. Mem. at 7-8.) Yet, that is true in nearly all instances
in which plaintiffs successfully sue ERISA plans; adopting Defendants argument, therefore,
would mean that successful ERISA plaintiffs could rarely (if ever) recover attorneys fees. Such
a holding would emasculate the attorney-fee provision in 29 U.S.C. 1132(g).
-5-
of the Plans terms to justify that suspension, and a history of litigation between the
parties suggests that Defendants termination of Plaintiffs pension benefits was a thinly
veiled attempt at retribution.
In addition, Defendant has proffered no evidence indicating that it is unable to pay
an award of attorneys fees, and the record suggests that Defendant does indeed possess
that capability. Defendant hired an admittedly large law firm (see Def. Mem. at 11) to
defend this action, clearly resulting in significant legal fees being incurred. It also does
not escape the Courts notice that Defendant suggests the ability-to-pay factor militates
in its favor without ever actually arguing that it would be unable to pay a fee award.
(See id. at 7-8.) Finally, the Court believes that an award of fees will deter Defendant
from adopting such an overbroad and unwarranted reading of the Plans terms in the
future.
For all of these reasons, the Court concludes that Plaintiff is entitled to an award of
attorneys fees in this case.2
3 Defendant has, however, submitted the Affidavit of Amy Court, which lists the hourly
rates charged by Defendants attorneys.
-6-
B. The amount of fees requested will be reduced
Both parties agree that the lodestar method i.e., the reasonable hourly rate
multiplied by the reasonable number of hours expended is the appropriate method by
which to calculate fees in this case. (See Pl. Mem. at 10; Def. Mem. at 10.) The Eighth
Circuit has approved the use of the lodestar method to calculate attorneys fees in ERISA
cases, e.g., Brown v. Aventis Pharms., Inc., 341 F.3d 822, 829 (8th Cir. 2003), and the
Court will do so here.
1. Reasonable hourly rates
The Court may use its own knowledge when setting the reasonable hourly rate to
be awarded, which must equal the prevailing market rate in the relevant legal community
for similar services by lawyers of comparable skills, experience, and reputation. See
Blum v. Stenson, 465 U.S. 886, 895 & n.11 (1984) (factors to consider in determining
hourly rate); Hanig v. Lee, 415 F.3d 822, 825 (8th Cir. 2005) (court may use its own
experience and knowledge when fashioning hourly rate). Plaintiff seeks 0 per hour
for work performed by attorney Robert J. Hajek and 0 per hour for work performed by
attorney Donald L. Beauclaire. Neither party has directed the Courts attention to any
recent fee awards in Minnesota (or elsewhere) setting hourly rates for attorneys in ERISA
cases, and neither party has submitted an affidavit from other attorneys within the local
legal market opining on the reasonableness of the rates sought.3
4 Defendant makes the curious argument that attorney Hajeks requested rate is excessive
because practitioners with more experience and expertise in the area of law in question have
hourly rates that are substantially less. (Def. Mem. at 11 (emphases added).) To support that
argument, Defendant points to David S. Anderson, an attorney employed at McGrann Shea
(Defendants law firm). Attorney Anderson, however, was admitted to the Minnesota bar in the
same year as attorney Hajek and bills at a rate of 5 per hour, only less than the rate sought
by attorney Hajek. (Court Aff. 3.) Defendant also assails attorney Hajeks statement that he
has in excess of 30 years experience when, in fact, he has just under 30 years experience.
(See Def. Mem. at 11 (noting that attorney Hajek was admitted to the Minnesota bar on
September 29, 1978).) Yet, Defendant is also guilty of such puffery it asserts that attorney
Anderson has over 30 years experience (Court Aff. 3) when attorney Anderson was admitted
to the bar on May 5, 1978. See http://www.mncourts.gov/mars/AttorneyDetail.aspx?id=0001818
(last visited May 1, 2008).
-7-
Based on the Courts own knowledge and experience, it concludes that the 0
hourly rate sought for attorney Hajek, who has practiced law for approximately 30 years,
is reasonable in this case. See White v. Martin, 290 F. Supp. 2d 986, 992 (D. Minn.
2003) (Tunheim, J.) (in ERISA case, awarding 5 per hour to attorney with 20 years
experience).4 In the Courts view, however, the hourly rate sought by attorney Beauclaire
is excessive given his limited experience and the lack of complexity of this case. See id.
(awarding attorney with 9 years experience 0 per hour); see also Olson v. Messerli &
Kramer, P.A., Civ. No. 07-439, 2008 WL 1699605, at *2 (D. Minn. Apr. 9, 2008)
(awarding attorney with 9 years experience 5 per hour in Fair Debt Collection
Practices Act case). The Courts knowledge of the local legal market leads it to conclude
that an hourly rate of 0 is appropriate for attorney Beauclaire in this matter. (See also
Court Aff. 2-3 (attorney with 6 years experience billing 5 per hour and attorney
with 2 years experience billing 0 per hour).)
-8-
Plaintiff also asserts that the Court should use a blended hourly rate of 0 per
hour which is the average of attorney Hajeks requested rate of 0 and attorney
Beauclaires requested rate of 0 for all 277.7 hours expended in this case. The
Court declines to do so for two reasons. First, the number of hours expended here have
been succinctly broken down on a 7-page billing record submitted by Plaintiffs counsel.
Given that the number of hours expended is relatively low, it will not be a significant
undertaking for the Court to calculate the lodestar amount by using the individual billing
rates of attorneys Hajek and Beauclaire, rather than a blended (or average) hourly rate.
Second, the use of a blended rate would overcompensate Plaintiff for time expended by
attorney Beauclaire, who performed the vast majority of the work in this case. (See
Hajek Aff. Ex. A (indicating that attorney Hajek expended 61.05 hours and attorney
Beauclaire expended 216.65 hours).) Since attorney Hajek performed far less work than
attorney Beauclaire, using a blended hourly rate would improperly skew the average
hourly rate higher. See SEC v. Goren, 272 F. Supp. 2d 202, 208 (E.D.N.Y. 2003) (use of
blended hourly rate risks under- or over-compensating [attorneys] for their efforts).
2. Reasonable number of hours expended
Plaintiff seeks reimbursement for 61.05 hours expended by attorney Hajek and
216.65 hours expended by attorney Beauclaire in this matter. Defendant argues that
several entire categories of work performed by Plaintiffs attorneys must be excluded, and
further challenges the number of hours devoted to certain other tasks. The Court
addresses each of Defendants arguments below.
5 The Complaint in this case was filed on April 10, 2007. Although it is not entirely clear
from the billing records submitted by Plaintiffs counsel, it appears that work on the Complaint
did not commence until March 20, 2007. Accordingly, the Court will exclude all hours
expended prior to that date: 21.15 hours by attorney Hajek and 16.95 hours by attorney
Beauclaire.
-9-
Defendant first argues that all hours expended during the administrative process
must be excluded. (See Def. Mem. at 13-14.) In Parke v. First Reliance Standard Life
Insurance Co., 368 F.3d 999 (8th Cir. 2004), the Eighth Circuit held that ERISA does
not allow recovery of attorneys fees incurred during pre-litigation administrative
proceedings. Id. at 1010. Therefore, the time expended prior to the commencement of
this action which was devoted to an administrative appeal of the suspension of
Plaintiffs pension benefits must be excluded. Id.5 For the same reason, the Court will
also exclude .89 in costs incurred prior to March 20, 2007 (messenger service on
3/31/06, 5/3/06, and 8/18/06, plus photocopying on 2/28/07).
Defendant next argues that all hours expended in connection with Plaintiffs
demand for arbitration should be excluded. (See Def. Mem. at 14-15.) When Plaintiff
initially filed his Complaint, he argued that this entire case was subject to arbitration, and
he included in his Complaint a claim (Count 1) seeking an order compelling arbitration of
the instant matter. Plaintiff moved for summary judgment on that claim, which the Court
denied; the Court concluded that Plaintiff had no right to arbitration and entered
summary judgment for Defendant sua sponte on Count 1. Because Plaintiff was not
successful on this claim, Defendant argues that all hours expended in connection
therewith must be excluded. The Court agrees.
-10-
In Hensley v. Eckerhart, 461 U.S. 424, 434-35 (1983), the Supreme Court held that
a prevailing party may not recover fees for distinct, unrelated claims on which he has
been unsuccessful. See also Jenkins ex rel. Jenkins v. Missouri, 127 F.3d 709, 716 (8th
Cir. 1997) (If any issues on which the plaintiff lost are unrelated to those on which he
won, the unrelated issues must be treated as if they were separate cases and no fees can be
awarded.); White, 290 F. Supp. 2d at 991 (applying Hensley and Jenkins in an ERISA
case). Plaintiffs claim that this matter was subject to arbitration (Count 1) was wholly
distinct from his claims that his pension benefits were improperly suspended (Counts 2
and 3); the claim was predicated on an amendment to the Plans terms that had no impact
on the propriety (or lack thereof) of the suspension. Moreover, the Court concluded that
Count 1 was meritless and granted summary judgment in Defendants favor on that claim.
Nevertheless, Plaintiff argues that these hours should not be excluded because
Defendant initially refused to arbitrate this matter, but then later agreed to arbitration.
(See Pl. Mem. at 10-12.) The Court is not persuaded by this argument. Defendant was
surely correct to reject Plaintiffs initial arbitration demand, insofar as it was under no
obligation to arbitrate this dispute (as the Court held when it granted summary judgment
sua sponte on Count 1). Further, Defendant should not be penalized for subsequently
agreeing to arbitration, because it did so in an attempt to resolve Plaintiffs summary
judgment motion without Court intervention. Notably, Plaintiff rejected Defendants
offer and demanded more than ,000 in attorneys fees before he would proceed to
arbitration; only then did Defendant file its response to Plaintiffs motion. Under these
6 These hours are set forth in Exhibit E to the Affidavit of Amy Court. The Court notes
that several of the entries it has excluded appear to include both compensable and noncompensable
tasks. For example, attorney Beauclaires billing entry for June 18, 2007, states
Service of Rule 26 disclosures[;] research regarding possible summary judgment [on Count 1].
(Hajek Aff. Ex. A.) The time devoted to discovery is compensable; the time devoted to
summary judgment is not. However, where an attorneys fee documentation is inadequate to
permit the Court to distinguish compensable tasks from non-compensable tasks, the Court may
deny recovery for the entire time entry. See, e.g., Fabbrini v. City of Dunsmuir, No. 2:07-CV-
1099, 2008 WL 1808502, at *2 (E.D. Cal. Apr. 22, 2008) (collecting cases). The Court has
elected to do so here.
-11-
facts, the Court does not believe it is inequitable to exclude the time Plaintiffs counsel
devoted to Count 1.
Accordingly, the Court will deduct 10.3 hours expended by attorney Hajek and
54.6 hours expended by attorney Beauclaire in connection with Count 1.6
Finally, Defendant raises a litany of other arguments concerning the billing entries
submitted by Plaintiffs counsel, including that they (1) are excessive, (2) include noncompensable
clerical activities, and (3) include some time entries unrelated to this case.
(Def. Mem. at 12-13, 15-17.) The Court agrees with these arguments and concludes that
a percentage reduction will compensate for any unnecessary, redundant, excessive, or
otherwise non-compensable hours. Based on its review of the billing entries submitted,
the Court concludes that a further 20% reduction (in addition to the reductions set forth
above) is appropriate to address these concerns.
As a result of the foregoing, the Court concludes that Plaintiff is entitled to recover
attorneys fees in the amount of ,800, calculated as follows:
-12-
Attorney Hajek
Hours requested: 61.05
Reductions: -- 21.15 (pre-litigation administrative process)
-- 10.3 (hours concerning Count 1)
Total: 29.6 hours
Further 20%
reduction: -- 5.92 hours
Total number of
compensable hours
(rounded to nearest
hour): 24 hours
Lodestar amount for
Attorney Hajek: 24 hours x 0 per hour = ,400
Attorney Beauclaire
Hours requested: 216.65
Reductions: -- 16.95 (pre-litigation administrative process)
-- 54.6 (hours concerning Count 1)
Total: 145.1 hours
Further 20%
reduction: -- 29.02 hours
Total number of
compensable hours
(rounded to nearest
hour): 116 hours
Lodestar amount for
Attorney Beauclaire: 116 hours x 0 per hour = ,400
-13-
TOTAL LODESTAR AMOUNT: ,400 + ,400 = ,800
There is a strong presumption that the lodestar amount represents the reasonable
attorney fee to be awarded. City of Burlington v. Dague, 505 U.S. 557, 562 (1992). That
amount may be adjusted upward or downward, however, on the basis of the results
obtained. Wheeler v. Mo. Highway & Transp. Commn, 348 F.3d 744, 754 (8th Cir.
2003) (citing Hensley, 461 U.S. at 434). Here, Plaintiff has not sought an enhancement of
the lodestar amount and Defendant has not sought a further reduction thereof (save the
matters discussed above), and the Court concludes that neither an enhancement nor a
further reduction is warranted. Accordingly, Plaintiff is entitled to recover attorneys fees
in the amount of ,800.
Finally, the Court pauses to address costs. Besides the costs excluded above (see
supra at 9), Plaintiff also seeks to recover 0 for the filing fee and .40 for
photocopies. Such costs may be recovered pursuant to 28 U.S.C. 1920, and Defendant
has not objected thereto. Accordingly, the Court will also award Plaintiff 9.40 in
costs.
-14-
CONCLUSION
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
ORDERED that:
1. Plaintiff is entitled to the resumption of his monthly pension payments by
Defendant, and Defendant shall resume making such payments, commencing on June 1,
2008; and
2. Plaintiff shall recover of Defendant ,471.34, comprised of ,837.80 in
back pension payments, ,424.14 in pre-judgment interest, ,800 in attorneys fees,
and 9.40 in costs.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: May 1, 2008 s/Richard H. Kyle
RICHARD H. KYLE
United States District Judge
 

 
 
 

  What day were you injured?

  / /


  What caused your injuries?
Traffic/Bicycle Accident
Work-Related Injury
Wrongful Death
Dog Bite
Slip and Fall
Other:


  How have your injuries affected

  your life?

 


  What kinds of medical care
  professionals have you seen?

 


  What has your treatment cost?

 

  Is Insurance Involved?
My insurance may cover
        this.

Someone else's insurance
        may cover this.

I already filed a claim.
I rejected a settlement
        offer.

I accepted a settlement
        offer.

  Were there any witnesses?
Bystanders Witnessed This.
Police Responded and Filed
        a Police Report

Police Responded but Did
        Not File a Police Report


 

 

          By visiting this page or clicking the
  "submit" button above, you agree
  that you have read and accept this   "disclaimer".
 
Copyright © Michael E. Douglas, Attorney at Law, Saint Paul MN. All Rights Reserved.
Minnesota Law Firm representing Personal Injury, Car / Auto Accident, Workers Compensation, Medical Malpractice, Social Security Disability claims.
Dedicated to Injured Workers, Victims of Negligence, Car Accidents, Victims of Fraud, and those in need of legal assistance.