Opinion
CIVIL ACTION NO: 97-2757, SECTION: "J" (3)
April 8, 2002
ORDER AND REASONS
Before the Court is Plaintiffs' Motion for Attorneys' Fees (Rec. Doc. 305). The motion, set for hearing on March 13, 2002, is before the Court on the briefs and is unopposed by Defendants. Upon considering the Plaintiffs' motion, memorandum, exhibits, and the applicable law, the Court concludes that the motion should be GRANTED in part and DENIED in part.
Background
This motion arises out of an ERISA class action, in which the Court ruled in favor of Plaintiffs and awarded them $5,394,620, for pension benefits and pre-judgment interest, following a bench trial on July 30-31, 2001. As Plaintiffs point out in their motion for fees, this complicated litigation has spanned more than four years and has witnessed several changes of counsel. The inherent complications of this class action litigation were compounded by the sale of Schwegmann's grocery business and consequent loss of many business records, the bankruptcy of Schwegmann Giant Super Markets. Furthermore, this case raised many novel issues under ERISA.
The factual and procedural history of this case was detailed in the Court's Findings of Fact and Conclusions of Law (Rec. Doc. 268), reported at 159 F. Supp.2d 329. See also Amended Final Judgment (Rec. Doc. 300), dated January 25, 2002.
In light of the duration, difficulty, and novelty of this litigation, Plaintiffs' counsel have requested attorneys' fees, including costs and expenses through January 2002, in the total amount of $422,762.25. For the following reasons, the Court finds that award to be fair and reasonable under the applicable law.
However, Plaintiffs' counsel also request that the Court award them an enhancement of their fees out of the common fund in the amount of a multiplier of 1.5, or $634,089. Because the Court concludes that counsel for Plaintiffs have not met their burden of demonstrating that an enhancement is necessary in this case in order to award them a reasonable fee, counsel's request for an enhancement is denied for reasons that follow.
Discussion
I. Fees Under ERISA's Fee-Shifting Statute
ERISA provides that the Court may "in its discretion allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132 (g)(1). The Court has already stated that it finds Plaintiffs are entitled to attorneys' fees under that provision. See Findings of Fact and Conclusions of Law, Rec. Doc. 268, at 67-68. Accordingly, the Court must use the "lodestar" method to determine the amount to be awarded. See Wegner v. Standard Ins. Co., 129 F.3d 814, 822 (5th Cir. 1997) (citingTodd v. AIG Life Ins. Co., 47 F.3d 1448, 1459 (5th Cir. 1995)). Under the lodestar method, the Court determines the reasonable number of hours expended on the litigation and the reasonable hourly rates for the participating attorneys. See id. Then, the Court multiplies the two figures together to arrive at the "lodestar." Id. (citing Louisiana Power Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995); Forbush v. J.C.Penney Co., 98 F.3d 817, 821 (5th Cir. 1996))
The Court then determines whether the lodestar should be adjusted upward or downward, after assessing the factor set forth in Johnson v. Georgia Highway Express, 488 F.2d 714, 717-19 (5th Cir. 1974), in light of the specific circumstances of the case. See id. The Johnson factors include: (1) the time and labor required for the litigation; (2) the novelty and complication of the issues; (3) the skill required to properly litigate the issues; (4) whether the attorney had to refuse other work to litigate the case; (5) the attorney's customary fee; (6) whether the fee is fixed or contingent; (7) whether the client or case circumstances imposed any time constraints; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) whether the case was "undesirable;" (11) the type of attorney-client relationship and whether that relationship was long-standing; and (12) awards made in similar cases. Johnson, 488 F.2d at 717-19.
A. Reasonable Hours
As noted, the first step in determining reasonable attorneys' fees is an evaluation of the number of hours reasonably expended. See Louisiana Power Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir. 1995) (citingBaughman v. Wilson Freight Forwarding Co., 583 F.2d 1208, 1214 (3d Cir. 1978)). Accordingly, the Court must determine if the hours claimed by Plaintiffs' counsel were reasonably expended on the instant litigation.Id. Plaintiffs bear the burden of establishing entitlement to the requested award through documenting the appropriate hours expended and hourly rates. Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 5 .Ct. 1933, 1939, 76 L.Ed.2d 40 (1983)). Therefore, the documentation must be sufficient for the Court to verify that the applicants have met their burden. Id.
Plaintiffs' attorneys herein seek reimbursement for 2510.15 hours spent on this matter through January 2002. Plaintiffs have attached to their motion the affidavit of lead counsel, Nancy Picard, and contemporaneous time logs of attorneys and paralegals employed by Robein, Urann, Luryre, which set forth the amount of time spent on this litigation on discovery, research, preparation of pleadings, factual analysis, and trial. See Rec. Doc. 300, Exhs. 1, 2, 6, and 7. Additionally, Plaintiffs' counsel aver that they have eliminated fees for time spent on certain unsuccessful claims, any duplicative attorney work, time spent by associate attorneys when their work had be reviewed and/or revised by counsel of record, time spent on pleadings related to a proposed settlement with one defendant that never materialized, and time spent by paralegals that appeared to be excessive or clerical in nature. These deductions are indicated on the billing entries submitted to the Court.
Having reviewed Plaintiffs' time logs and billing entries, and in light of the fact Defendants do not oppose any aspect of Plaintiffs' application, the Court concludes that 2510.15 hours was a reasonable amount of time expended on this case. The Court found no evidence that the number of fee request hours included excessive, redundant, or otherwise unnecessary billing. See Hensley, 461 U.S. at 435, 103 S.Ct. at 1940.
B. Reasonable Rates
The second step in determining the lodestar is to consider whether Plaintiffs' attorneys' requested rates for time expended on this case is reasonable. Reasonable hourly rates are to be measured by the prevailing market rates for the private bar, considering the rate that attorneys of similar ability and experience in the same community typically charge their paying clients for the type of work at issue. Longden v. Sunderman, 979 F.2d 1095, 1099-1100 (5th Cir. 1992). Counsel for Plaintiffs have attached affidavits to their application, attesting to the fact that they and their firm are experienced in both ERISA and complex litigation and the rates requested, $160 and $200 per hour for attorneys and $60 per hour for experienced paralegals, are within the range of rates charged by members of the bar in this geographic area with comparable experience for comparable litigation. In support of their assertion, Plaintiffs attach affidavits of two local attorneys who engage in a similar legal practice, who confirm that the requested rates are within the prevailing market rates for the New Orleans area. See Rec. Doc. 300, Exhs. 12 and 13. Plaintiffs also direct the Court's attention to several cases in the Fifth Circuit, which demonstrate the reasonableness and fairness of the requested rates as well.
See, e.g., Carrabba v. Randalls Food Markets, Inc., 145 F. Supp. 763 (N.D.Tex. 2000), aff'd, 252 F.3d 721 (5th Cir. 2001) (finding that attorneys' fees ranging from $120 to $325 per hour was fair under ERISA fee shifting statute).
Again, given the evidence presented by Plaintiffs' counsel, the complexity of this litigation, and the lack of opposition to the requested rates by Defendants, the Court concludes that the requested rates are both reasonable and fair.
C. Costs and Expenses
Plaintiffs request that various expenses and costs, including the expenses of computer research and the costs of work performed by several individuals on behalf of the plan, be taxed against the Defendants as well. ERISA provides not only for a "reasonable attorney's fee," but also for the "costs of action." 42 U.S.C. § 1132 (g). The Fifth Circuit has stated that "all reasonable out-of-pocket expenses, including charges for photocopying, paralegal assistance, travel, and telephone, are plainly recoverable in (attorney's] fee awards because they are part of the costs normally charged to a fee-paying client." Associated Builders Contractors of Louisiana Inc. v. Orleans Parish School Bd., 919 F.2d 374, 380 (5th Cir. 1990) (citing International Woodworkers of Am. v. Champion Int'l Corp., 790 F.2d 1174, 1185 (5th Cir. 1986); Missouri v. Jenkins, 491 U.S. 274, 109 S.Ct. 2463, 2470, 105 L.Ed.2d 229, 241 (1989)). Under this reasoning, courts have found that the cost of reasonable computerized legal research is recoverable as well. See United States v. Merritt Meridian Constr. Corp., 95 F.3d 153, 173 (2nd Cir. 1996) ("[C]omputer research is merely a substitute for an attorney's time that is compensable under an application for attorneys' fees. . . .");Haroco, Inc. v. American Nat'l Bank and Trust Co. of Chicago, 38 F.3d 1429, 1440 (7th Cir. 1994); Johnson v. University College of the Univ. of Ala. in Birmingham, 706 F.2d 1205, 1209 (11th Cir. 1983)
While the Court in Associated Builders was interpreting 28 U.S.C. § 1988 attorney's fee awards, that statute simply provides that the prevailing party may be awarded "a reasonable attorney's fee." As there is no special language in that statute to suggest that the Court's interpretation of what expenses can be included in a reasonable attorney's fee under § 1988 would not similarly be recoverable as part of a reasonable attorney's fee under ERISA.
Additionally, ERISA's provision allowing for costs has generally been construed as "empowering courts to shift only the types of `costs' a court may tax under 28 U.S.C. § 1920, and only the amounts of those costs a court may tax under section 1920, under 28 U.S.C. § 1821 or under other relevant provisions." Agredano v. Mutual of Omaha Companies, 75 F.3d 541, 543 (9th Cir. 1996). Finally, Plaintiffs concede that expert fees are not recoverable as "costs" under ERISA, as there is no specific statutory provision for recovery of such fees. See Holland v. Valhi Inc., 22 F.3d 968, 979 (10th Cir. 1994) (discussing Supreme Court's opinion in West Virginia Univ. Hosp., Inc. v. Casey, 499 U.S. 83, 111 S.Ct. 1138, 113 L.Ed.2d 68 (1991), in which Court held that expert fees were not recoverable in civil rights litigation under statutory language awarding a "reasonable attorney's fee" absent an express provision shifting expert fees).
Those statutes provide in relevant part:
A judge or clerk of any court of the United States may tax as costs the following:
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and copies of papers necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.
A bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree.28 U.S.C. § 1920.
Title 28 U.S.C. § 1821 additionally provides that a witness shall be paid an attendance fee of $40 per day and for actual travel expenses.
Bearing in mind these principles, the Court considers Plaintiffs' requested expenses and costs in the instant matter. Plaintiffs have itemized and categorized their costs in Exhibit 4 attached to their application. Upon considering Plaintiffs' application and the fact Defendants have not opposed any portion of the application, the Court finds that Plaintiffs' requests are reasonable in light of the duration and scope of this litigation and they are entitled under ERISA to recover all of their requested costs from Defendants.
Plaintiffs have also attached all relevant invoices and receipts.
The Court finds persuasive Plaintiffs' arguments as to why the fees and costs of work performed by Steve Osborn, enrolled actuary, Belinda Daigle, a computer programmer familiar with the Schwegmann mainframe computer system who was able to download the necessary reports on employees, and Roy Lacoste, a former Schegmann executive, are taxable costs and expenses. First, as Plaintiffs point out, these three individuals' services were not in the nature of expert services, but involved work and calculations that necessarily had to be performed on behalf of the plan, because Schwegmann had not retained many necessary records and had not properly administered the grocery voucher plan in accordance with ERISA. Further, Plaintiffs also accurately note that both this Court and the Magistrate Judge ordered certain calculations made and fees paid, with respect to these three individuals. Accordingly, the Court concludes that the fees paid these three individuals did not constitute expert fees and are properly taxable against Defendants under the Court's award of reasonable attorneys' fees and costs of the action.
II. Enhancement of the Lodestar from Common Fund
The Supreme Court has explained that there is a strong presumption that the lodestar is the reasonable fee to be awarded and that the fee applicant bears the burden of demonstrating that an enhancement "`is necessary to the determination of a reasonable fee.'" City of Burlington v. Dague, 505 U.S. 557, 562, 112 S.Ct. 2638, 2641, 120 L.Ed.2d 449 (1992) (quoting Blum v. Stenson, 465 U.S. 886, 898, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984)). Accordingly, when making an enhancement, a district court "must explain with a reasonable degree of specificity the findings and reasons upon which the award is based, including an indication of how each of the Johnson factors was applied." Shipes v. Trinity Indus., 987 F.2d 311, 320 (5th Cir. 1993) (Shipes II), cert. denied, 510 U.S. 991, 114 S.Ct. 548, 126 L.Ed.2d 450 (1993)
As previously discussed, the Johnson factors include: (1) the time and labor required for the litigation; (2) the novelty and complication of the issues; (3) the skill required to properly litigate the issues; (4) whether the attorney had to refuse other work to litigate the case; (5) the attorney's customary fee; (6) whether the fee is fixed or contingent; (7) whether the client or case circumstances imposed any time constraints; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) whether the case was "undesirable;" (11) the type of attorney-client relationship and whether that relationship was long-standing; and (12) awards made in similar cases. Johnson, 488 F.2d at 717-19.
However, the Supreme Court and the Fifth Circuit have clarified that not all of the Johnson factors may properly warrant an enhancement of the lodestar. For example, in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565, 106 S.Ct. 3088, 3098, 92 L.Ed.2d 439 (1986), the Supreme Court greatly limited the use of the second, third, eighth, and ninth factors, as it explained that the novelty and complexity of the issues, the special skill required, the results obtained, and the experience and reputation of the attorney are "presumably fully reflected in the lodestar amount, and thus cannot serve as independent bases for increasing the basic fee award." The Fifth Circuit further clarified that an enhancement based on any of those four factors is only justified in "rare cases" and when supported by specific evidence and the district court's detailed findings. See Walker v. U.S. Dept. of Housing and Urban Development, 99 F.3d 761, 771-72 (5th Cir. 1996) (quoting Alberti v. Klevenhagen, 896 F.2d 927, 936 (5th Cir. 1990)). Further, an enhancement based on the eighth factor of the "results obtained," is only appropriate if the applicant demonstrates that it is customary in that field of law for attorneys to charge an additional fee in excess of their hourly rates for an exceptional result. Id. (quoting Shipes II, 987 F.2d at 322).
Additionally, the Fifth Circuit has stated that the first Johnson factor (the time and labor involved) is already included in the lodestar and, therefore, should not be double-counted by the district court in considering an enhancement. Walker, 99 F.3d at 771 (quoting Shipes II, 987 F.2d at 320). Similarly, the seventh factor — the time constraints involved — is "subsumed in the number of hours reasonably expended." Id. (citing Shipes II, 987 F.2d at 321). Finally, the Supreme Court has barred use of the sixth factor regarding the attorney's contingent risk in awarding an enhancement. See Burlington, 505 U.S. at 567, 112 S.Ct. at 2643.
In the present case, counsel for Plaintiffs rely on the second factor (the novelty and complexity of the issues), the eighth factor ("results obtained"), and the third and ninth factors (the skill required to litigate the case and the experience of the attorneys), to persuade the Court that an enhancement of the lodestar is warranted. As discussed, to support an enhancement based on these factors, the Court must find that this is a "rare case" and that the enhancement is supported by "`specific evidence in the record and detailed findings. . . .'" Walker, 99 F.3d at 771-72 (quoting Alberti, 896 F.2d at 936)
While the Court agrees with counsel for Plaintiffs that, in general, this was a complicated case, the Court finds that counsel has failed to demonstrate that this is a rare case in which an enhancement "is necessary to the determination of a reasonable fee." Blum, 465 U.S. at 898, 104 S.Ct. at 1548. In the Court's view, the Johnson factors on which counsel rely for an enhancement have already been adequately taken into account in the lodestar calculation. As discussed above, the Fifth Circuit has specifically cautioned against the district court "double-counting" factors in determining whether an enhancement is appropriate. See Walker, 99 F.3d at 771. Moreover, the factors upon which counsel in the instant matter rely — the novelty and complexity of issues, the special skill required, the results obtained, and the experience and reputation of the attorney — are the exact same factors expressly limited by the Supreme Court in the determination of an enhancement, because they are "presumably fully reflected in the lodestar amount, and thus cannot serve as independent bases for increasing the basic fee award." Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. at 565, 106 S.Ct. at 3098.
Furthermore, an enhancement based on the eighth "results obtained" factor "is only appropriate when the fee applicant can demonstrate that `it is customary in the area for attorneys to charge an additional fee above their hourly rates for an exceptional result.'" Walker, 99 F.3d at 772 (quoting Shipes II, 987 F.2d at 322). Plaintiffs' counsel have made no such showing in their application.
Counsel for Plaintiffs do attach affidavits from other attorneys practicing in the area regarding contingency fee rates, but, as noted, the Court may not consider any contingency fee arrangements in determining whether an enhancement is appropriate under Supreme Court law.
Finally, the Court is cognizant of the Supreme Court's discussion of the purpose behind fee-shifting statutes as explained in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air:
A strong presumption that the lodestar figure-the product of reasonable hours times a reasonable rate-represents a "reasonable" fee is wholly consistent with the rationale behind the usual fee-shifting statute. . . . These statutes were not designed as a form of economic relief to improve the financial lot of attorneys, nor were they intended to replicate exactly the fee an attorney could earn through a private fee arrangement with his client. Instead, the aim of such statutes was to enable private parties to obtain legal help in seeking redress for injuries resulting from the actual or threatened violation of federal laws. Hence, if plaintiffs . . . find it possible to engage a lawyer based on the statutory assurance that he will be paid a "reasonable fee," the purpose behind the fee-shifting statute has been satisfied.478 U.S. at 565, 106 S.Ct. at 3098. The Court concludes that the purpose of ERISA's fee-shifting statute has been met in the instant matter through the award of the lodestar amount of fees.
For all of these reasons, the Court determines that counsel for Plaintiffs have not demonstrated that an enhancement is necessary in order to award them reasonable fees.
The Court additionally notes that, had it determined an enhancement was necessary in this case, because Plaintiffs' counsel have requested that the enhancement come out of the common fund, the Court would have in all likelihood required that notice be sent to the class members, so that a fairness hearing could be held, in order to protect the class members' due process rights.