Opinion
No. CV-03-3659 (JMA).
December 2, 2005
Charles Pergue Cary Kane, LLP New York, New York, Attorney for Plaintiffs
Eugene F. Levy, Esq. Kew Gardens, New York, Attorney for Defendant
ORDER
Plaintiffs, the trustees and fiduciaries (the "Trustees") of Local 807 Labor-Management Health and Pension Funds (the "Funds"), brought this action pursuant to sections 502 and 515 of the Employee Retirement Income and Security Act of 1974, as amended ("ERISA"), 29 U.S.C. §§ 1132(a)(3) and 1145, against defendant, River Trucking and Rigging, Inc. ("River Trucking"), to collect unpaid fringe benefit contributions to the Funds. Plaintiffs also sought interest, liquidated damages, as well as attorney's fees and costs pursuant to 29 U.S.C. § 1132(g)(2).
Plaintiffs moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. By Order dated September 20, 2005, I granted plaintiffs' motion for summary judgment as to defendant's liability for unpaid contributions to the Funds in the amount of $15,048.80, plus interest, liquidated damages, attorney's fees, and costs. Plaintiffs were ordered to submit documentation, including all relevant provisions of the collective bargaining agreement and any trust agreements, to support its request for interest and liquidated damages, as well as an affidavit to support its request for attorney's fees and costs. Having reviewed plaintiffs' documentation, I hereby order that plaintiffs be awarded damages in the sum of $38,944.36, attorney's fees in the sum of $19,687.50, and costs in the sum of $1,387.50, for a total damages award of $60,019.36.
I. DISCUSSION
A. Unpaid Contributions
The Funds hired Schultheis Panettieri to conduct an audit of defendant's payroll records for the period November 1, 1999 through September 30, 2003. (Pls.' 56.1 Stmt. ¶ 6.) The audit was conducted on November 14, 2003 and it was determined that for the period January 1, 2000 through December 31, 2002 defendant failed to make all of the required contributions to the Funds on behalf of employees Ryan Farrell, Julio Cali, and Henry Womack. (River Trucking Payroll Audit, annexed to Pls.' Mot. for Summ. J. at F0008-F00013.) The audit revealed that for the period January 1, 2000 through December 31, 2002 defendant's unpaid contributions totaled $15,048.80. (Id. at F00010.) Accordingly, defendant owes the Funds $15,048.80 for unpaid contributions.
B. Interest on Unpaid Contributions
ERISA provides that "interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of Title 26." 29 U.S.C. § 1132(g)(2). On October 8, 1996, the Trustees adopted an interest rate of 18 percent per annum for unpaid contributions. (See Affirmation of Charles Pergue dated Oct. 19, 2005 ("Pergue Aff."), Ex. E.) Simple interest at 18 percent per annum divided by 365.25 days yields a daily interest rate of 0.04928 percent. A daily interest rate of 0.04928 percent on the principal in arrears, $15,048.80, multiplied by the number of days in arrears through October 31, 2005, yields a total of $11,947.78. Accordingly, defendant owes the Funds $11,947.78 in interest on the unpaid contributions.
The Funds calculate daily interest using a calendar year of 365.25 days to account for leap year.
C. Double Interest or Liquidated Damages
This award of interest is in addition to the award of interest under § 1132(g)(2)(B). Thus, if the interest to be awarded is greater than the liquidated damages, the result of these two separate provisions is the award of double interest on the unpaid contributions.
Section 1132(g)(2)(C) provides that the court shall award "an amount equal to the greater of — (i) interest on the unpaid contributions, or (ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent. . . ." 29 U.S.C. § 1132(g)(2)(C). Article IV, ¶ 5 of the amended Declaration of Trust provides, "Trustees may require delinquent Employers to pay interest, liquidated damages and other costs and expenses . . . arising out of the collection of such Employer's delinquency to the Fund." (Pergue Aff., Ex. D.) The trust agreement, however, does not specifically provide a rate at which liquidated damages are to be calculated. Plaintiffs are therefore entitled to an award of double interest pursuant to § 1132(g)(2)(C)(i). See DeVito v. Hempstead China Shop, 831 F.Supp. 1037, 1042 (E.D.N.Y. 1993) rev'd on other grounds, 38 F.3d 651 (2d Cir. 1994). Accordingly, defendant owes the Funds $11,947.78 in double interest on the unpaid contributions.
D. Attorney's Fees and Costs
1. Fees
Section 1132(g) also provides for the granting of reasonable attorney's fees and costs in ERISA matters brought by fiduciaries to enforce the terms of the CBA. The Second Circuit has adopted the lodestar approach to calculating attorney fees. See Bourgal v. Lakewood Haulage, Inc., 827 F. Supp. 126, 129 (E.D.N.Y. 1993) (citing Chambless v. Masters, Mates Pilots Pension Plan, 885 F.2d 1053, 1058-59 (2d Cir. 1989)). In computing the lodestar, the court multiplies the number of hours reasonably worked by what it deems to be a reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983);Bourgal, 827 F. Supp. at 129. Awards for legal fees are calculated in accordance with "the prevailing market rates in the relevant community. . . ." Chambless, 885 F.2d at 1058 (quotingBlum v. Stenson, 465 U.S. 886, 895 (1984)). Moreover, "the district court must ascertain whether `the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.'" Id. at 1058-59 (quoting Blum 465 U.S. at 896 n. 11). When the lodestar has been calculated, the court considers "subjective factors, such as the risk of the litigation, the complexity of the issues, and the skill of the attorneys" New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1140 (2d Cir. 1983) and should exclude hours that are "excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S. at 434. Finally, a fee applicant has the burden of establishing its hourly rate and hours expended. See Blum, 465 U.S. at 896 n. 11.
To support plaintiffs' request for attorney's fees, plaintiffs' counsel, Charles Pergue, submitted contemporaneous time records that reflect 103.25 hours of work performed during the pendency of this action, amounting to $26,875.00. (See Supplemental Affirmation of Charles Pergue dated Oct. 20, 2005 ("Suppl. Pergue Aff."), Ex. A.) During the period July 18, 2003 through November 24, 2004, Mr. Pergue was a senior associate at Vladeck, Waldman, Elias Engelhard, P.C., where he represented plaintiffs in this action. (See Pergue Aff. ¶ 3.) He was assisted by Jaimie Dvoretzky, a junior associate at the firm, and paralegals. (Id. ¶ 4.) During his tenure at Vladeck, Waldman, Elias Engelhard, P.C., Mr. Pergue and his associates expended a total of 37 hours on this case, consisting of 22 hours for work performed by attorneys, billed at an hourly rate of $250.00, and 15 hours for work performed by paralegals, billed at an hourly rate of $100.00. (See Suppl. Pergue Aff. ¶ 4.)
Mr. Pergue graduated from New York Law School and was admitted to the New York bar in 1992. Since that time, Mr. Pergue has primarily represented mutliemployer benefit plans in ERISA collection lawsuits. (See Pergue Aff. ¶ 3.)
Ms. Dvoretzky graduated from George Washington University Law School in 2001. She was admitted to the Virginia bar in 2001, the Washington D.C. bar in 2002, and the New York bar in 2005. Since her graduation from law school, Ms. Dvoretzky has regularly represented mutliemployer benefit plans in ERISA collection lawsuits. (Id. ¶ 4.)
In December 2004, Mr. Pergue became a member of Cary Kane LLP, where he continued to represent plaintiffs in this action. Mr. Pergue was assisted by Ms. Dvoretzky, who joined Cary Kane LLP as an associate. (See Pergue Aff. ¶ 4.) During the period December 14, 2004 through October 14, 2005, Mr. Pergue and Ms. Dvoretzky expended a total of 66.25 hours on this case, reflecting, inter alia, 7.0 hours researching and drafting the Motion for Summary Judgment, 42.25 hours researching and drafting the Reply to Defendant's Opposition to Plaintiffs' Motion for Summary Judgment, and 13.0 hours drafting attorney affidavits and compiling exhibits. (See Suppl. Pergue Aff., Ex. A.)
Having reviewed the attorney affirmations and billing records, I find the hourly rates of $250.00 and $300.00 for work performed by Ms. Dvoretzky to be higher than the rates charged for comparable legal work performed by attorneys of similar experience in the Eastern District of New York. See generally Private Sanitation Union Local 813, Int'l Bhd. of Teamsters v. Gaeta-Serra Assocs., 02-CV-5526, 2005 WL 2436194, at *2 (E.D.N.Y. 2005) (firm billed $200.00 per hour for work performed by junior associates); King v. JCS Enter., Inc. 325 F. Supp. 2d. 162, 170 (2004) (firms billed $125.00-$175.00 for work performed by associates); Martas v. Zaros Bake Shop., Inc., 98-CV-5895, 2002 WL 1267999, at *6 (E.D.N.Y. 2002) (firm billed $200.00 per hour for work performed by associates). Ms. Dvoretzky is a junior associate with approximately four years of legal experience, yet her hourly billing rate is the same as Mr. Pergue, a partner with thirteen years of legal experience. This is unreasonable and not in accordance with the attorney billing practices in this district. I will therefore apply a rate of $200.00 per hour for legal services performed by Ms. Dvoretzky during the pendency of this action. This hourly rate is reasonable and in accordance with the prevailing rates for attorneys of similar experience in this district. This adjustment of the hourly billing rate reflects a $5,000.00 reduction in attorney's fees, reducing the total to $21,875.00.
I also find the number of hours expended in this case to be excessive. Of the 66.25 hours expended from December 14, 2004 through October 14, 2005, approximately 42.25 hours was spent researching and drafting plaintiffs' Reply to Defendant's Opposition to Plaintiffs' Motion for Summary Judgment ("Reply Brief"). Plaintiffs' Reply Brief was thirty-seven pages. The substance of the brief, however, was only eight pages and primarily consisted of a series of quotations from case law and the National Master Freight Agreement (the "Agreement"). The bulk of the brief consisted of exhibits, such as copies of relevant provisions of the Agreement and courtesy copies of the cases plaintiffs cited in the Reply Brief. While recognizing counsel's wide latitude regarding the expenditure of time and allocation of resources to a particular case, it is not without limitations. InHensley, the Court stated:
It should be noted that plaintiff's counsel spent six times the number of hours to research and draft the Reply Brief as it did to research and draft the Motion for Summary Judgment.
Counsel for the prevailing party should make a good-faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission. "Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority." Copeland v. Marshall, 641 F.2d 880, 891 (1980) (emphasis added).461 U.S. at 434. In light of counsel's expertise in ERISA litigation, and the fact that the legal issues presented in this case were neither novel nor complex, 42.25 hours is an unreasonable amount of time to have spent researching and drafting the Reply Brief.
In addition to the excessive hours expended researching and drafting the Reply Brief, the billing records submitted by plaintiffs' counsel also include entries for tasks performed by attorneys but that are more appropriately performed by paralegals. For example, an entry on March 18, 2005 indicates that Mr. Pergue spent part of 5.0 hours compiling motion papers, exhibits, affidavits, and scanning the documents for electronic filing with the court. Additionally, on October 5, 2005, Ms. Dvoretzky spent part of 5.0 hours compiling exhibits. In Bourgal v. Atlas Transit Mix Corp., No. 93-CV-0569, 1996 WL 75290 (E.D.N.Y. Feb. 7, 1996), the court reduced the fee amount because associates and partners spent time "proofreading, collating, faxing, copying, and serving documents. . . ." Id. at *6.
"[W]hen there is a fee application containing excessive hours, it is within the discretion of the district court to make an across the board percentage reduction." LaBarbera v. J.E.T. Resources, Inc., 01-CV-4039, 2005 WL 2898736 (E.D.N.Y. Nov. 4, 2005); see also S.E.C. v. Goren, 272 F.Supp. 2d. 202, 213 (E.D.N.Y. 2003) ("Courts have routinely reduced fees computed under lodestar methodology by deducting a percentage from the number of hours reasonably billed by or by deducting a lump sum."). After reviewing the contemporaneous time records submitted by plaintiffs' counsel and considering the nature of the case, the work performed, and counsel's expertise, I find that a 10 percent across-the-board fee reduction is appropriate. This 10 percent adjustment of attorney's fees amounts to $2,187.50, for a total reduction of $7,187.50.
Accordingly, defendant owes plaintiffs $19,687.50 for legal fees incurred during the pendency of this action.
2. Costs
ERISA also allows for the recoupment of costs incurred during the pendency of the action. 29 U.S.C. § 1132(g)(2)(D). Plaintiffs incurred costs of $1,210.50 for the audit, $150.00 for the filing fee, and $27.00 for service of process upon defendants. (See Pergue Aff. ¶ 9.) I find these expenses reasonable and award them in full. Accordingly, defendant owes plaintiffs costs in the amount of $1,387.50.
II. CONCLUSION
Accordingly, plaintiffs are awarded damages in the sum of $38,944.36, attorney's fees in the sum of $19,687.50, and costs in the sum of $1,387.50, for a total damages award of $60,019.36.SO ORDERED.