Mason v. Federal Express Corp.

          ORDER AND OPINION [RE: MOTIONS AT DOCKETS 81 AND 84]

          JOHN W. SEDWICK SENIOR JUDGE, UNITED STATES DISTRICT COURT

         I. MOTIONS PRESENTED

         At docket 81 plaintiff Maurice K. Mason (“Mason”) moves for an award of attorney’s fees pursuant to 29 U.S.C. § 1132(g)(1), supported by affidavits from his two lawyers at dockets 82 and 83. At docket 84 Mason moves for an award of prejudgment interest pursuant to D.Ak. L.R. 58.1(d), supported by his own affidavit at docket 85. Defendants Federal Express Corporation; FedEx Trade Networks Transport & Brokerage, Inc.; Aetna Life Insurance Company; Federal Express Corporation Short Term Disability Plan; and Federal Express Corporation Long Term Disability Plan (collectively, “Defendants”) respond to both motions at docket 89. Mason replies at docket 90.

         At docket 93 Michael Flanigan (“Flanigan”), one of Mason’s lawyers, filed a supplemental affidavit to update his attorney’s fees. At docket 102 Mason filed a notice of a reduction in his claim for attorney’s fees to remove time that Flanigan spent on Mason’s claim that arose under 29 U.S.C. § 1132(c). And, at docket 96 Mason filed a supplemental brief regarding his claim for prejudgment interest on his award of LTD benefits.

         Oral argument was not requested and would not assist the court.

         II. BACKGROUND

         The court has described the background giving rise to this litigation in detail in the order at docket 74. It need not be repeated here. Suf fice it to say for present purposes that Mason’s complaint asserts the following four claims under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”):^[1] (1) wrongful denial of Mason’s STD benefits claim; (2) wrongful refusal to consider his LTD benefits claim; (3) breach of fiduciary duty; and (4) failure to provide requested plan documents (under § 1132(c)). After the parties filed cross-motions for partial summary judgment, the court granted Mason partial summary judgment on his STD cause of action as to all defendants, except his employer, FedEx Trade Networks Transport & Brokerage, Inc. (“FedEx Trade”). The court granted summary judgment to FedEx Trade, holding that it is not a proper party to this action. As Mason concedes, this decision eliminated FedEx Trade from the case.^[2]

         The court partially remanded the case to the STD claims administrator to determine the amount of STD payments to be made to Mason and to the LTD claims administrator to determine the amount to be paid to Mason for past LTD benefits under the LTD Plan. Mason filed a motion at docket 79 requesting an evidentiary hearing on his § 1132(c) claim against Federal Express Corporation (“FedEx Corp.”), but this motion became moot when the parties settled the § 1132(c) claim. Pursuant to the settlement agreement, Mason reduced his request for attorney’s fees by five hours.^[3]

         III. STANDARD OF REVIEW

         Courts have discretion to allow reasonable attorney’s fees and prejudgment interest in ERISA cases.^[4] Defendants do not dispute that Mason is entitled to recover prejudgment interest or his attorney’s fees. Instead, they argue that Mason has not sufficiently established the validity of the sums he seeks.

         IV. DISCUSSION

         A. Mason’s Attorney’s Fee Request

         The Ninth Circuit recognizes a two-step approach to determining the amount of attorney’s fees in ERISA actions.^[5] Under this approach, the court first determines the loadstar by multiplying the hours reasonably expended on the case by a reasonable hourly rate.^[6] “The party seeking fees bears the burden of documenting the hours expended in the litigation and must submit evidence supporting those hours and the rates claimed.”^[7] Next, “in rare and exceptional cases, ” the court may adjust the lodestar upward or downward based on eleven factors^[8] set out by the Supreme Court in Hensley v. Eckerhart.^[9]

         1. The lodestar

         a. Hours reasonably expended

         Mason’s two lawyers initially submitted affidavits stating that they spent a combined 171.8 hours litigating this case (67.7 hours from Flanigan plus 104.1 hours from Paula M. Jacobson (“Jacobson”)) and paralegal Lisa Gallager (“Gallager”) spent 52.9 hours.^[10] In a supplemental affidavit, Flanigan added 17 more hours to his total.^[11]Flanigan then reduced his hours by five^[12] in accord with the parties’ stipulation at docket 100. All told, Mason is seeking to recover 183.8 hours of total attorney time (79.7 from Flanigan and 104.1 from Jacobson) and 52.9 hours of paralegal time.

         Defendants challenge many of the time entries as excessive. “[T]he burden of producing a sufficiently cogent explanation” for why a specific time entry is excessive is placed mostly “on the shoulders of the losing parties, who not only have the incentive, but also the knowledge of the case to point out such things as excessive or duplicative billing practices.”^[13] Defendants argue that Jacobson’s and Gallager’s hours are excessive because their firm merely drafted the initial complaint and worked on the case through the filing of the administrative record. They also challenge several of Flanigan’s time entries because, according to Defendants, this case “did not raise any unique issues that required lengthy analysis or briefing.”^[14]

         Defendants challenge 23 specific time entries. With regard to 22 of these 23 entries, Defendants state baldly that the entries are excessive. Because Defendants fail to provide specific explanations for why any of these entries are excessive, and the court does not find any of them to be objectively unreasonable, Defendants have failed to meet their burden with regard to these objections. The lone exception is Defendants’ objection to the 2.5 hours that Gallager spent on November 10, 2014, conducting legal research into “estoppel theory, Plan’s failure to delegate fiduciary duties (as relevant to standard of review.).”^[15] Defendants note that this was not a theory that Mason pursued in this case, and Mason effectively concedes that this time was not reasonably spent by not responding to Defendants’ specific objection. The court will reduce Gallager’s hours by 2.5. Mason will be awarded 183.8 hours of total attorney’s time, (79.7 from Flanigan and 104.1 from Jacobson) and 50.4 hours of paralegal time.

         b. Reasonable hourly rate

         Mason submits that $300 is a reasonable hourly rate for his attorneys’ work, and $100 per hour is a reasonable rate for paralegal work. Defendants do not challenge the paralegal rate, but do argue that Mason has not met his burden of showing that $300 per hour is the prevailing market rate for the services of lawyers in this community with Flanigan’s and Jacobson’s experience.

         Jacobson’s affidavit states that she has 26 years of experience handling civil matters, including ERISA cases, but does not cite any examples where a court has awarded her $300 per hour for her work. Similarly, Flanigan’s affidavit states that he has 36 years of experience, but cites no cases in which he was awarded the rate he seeks.

         In reply, Mason submits Horton v. Tesoro^[16] and Avila v. Pediatrix, ^[17] cases where courts awarded Flanigan fees at a rate of $300 per hour. In neither case did the defendant challenge the reasonableness of Flanigan’s requested $300 hourly rate.^[18]Although Jacobson was not involved in these cases, her experience is roughly comparable to Flanigan’s. The court finds that these cases are ...