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March 2012

Susan Rene Jones v. Metropolitan Life Ins. Co., et al. -Attorneys' Fee Motions Under ERISA Closely Scrutinized For Reasonableness

Attorneys' Fee Motion Partially Denied for Reliance on Excessive Attorney Hourly Rate and Attorney Time Expended; Ninth Circuit Fee Application Denied for Not Relating to Success on the Merits

2012 U.S. Dist. LEXIS 33817

Plaintiff filed a complaint, asserting a claim for benefits pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), against the Plan Administrator and MetLife.  The Northern District Court granted summary judgment in favor of the defendants and denied plaintiff attorneys' fee recovery.  The Ninth Circuit Court of Appeals reversed and vacated the district court's order, in part, including denial of attorneys' fees to plaintiff.  The Ninth Circuit remanded the motion for summary judgment, with instructions, and instructed plaintiff to "file a fee motion."  Plaintiff filed a motion for attorneys' fees and a Ninth Circuit fee application.

On remand, the Northern District Court granted in part and denied in part plaintiff's motion for attorneys' fees and denied the Ninth Circuit fee application outright.  In a detailed decision, Judge James Ware closely scrutinized plaintiff's fee motion for reasonableness and significantly reduced the fee request from $374,650.83, for compensation for 681.06 hours at a rate of $550 per hour, to $191,290.50, for compensation of 425.09 at a rate of $450 per hour.  This decision demonstrates that a recovery under ERISA does not provide a "blank check" for a fee award, and that courts in the Northern District of California will carefully scrutinize attorneys' fee motions for inflated hourly rates and excessive time billed -- and limit the award accordingly.

The court began its fee analysis with a "lodestar" calculation (multiplying the number of hours plaintiff reasonably expended on the litigation by the attorney's reasonable hourly rate).  Judge Ware then adjusted the presumptively reasonable loadstar figure base upon several factors outlined by the Ninth Circuit in Kerr v. Screen Guild Extras, Inc., 526 F.2d 67, 70 (9th Cir. 1975).  Of the twelve Kerr factors, Judge Ware focused his analysis on (1) the reasonable hourly rate; and (2) the correct total number of hours. 

The court reviewed evidence submitted in support of plaintiff's attorney's hourly rate and found the $550 rate was not reasonable in light of evidence that (1) attorneys "of an ability and reputation comparable to that" of plaintiff's counsel received between $450 and $550 per hour for work in the time period at issue; and (2) a court in the Northern District made a determination that a reasonable hourly rate for plaintiff's counsel during the relevant time period at issue was $450 per hour.  Judge Ware accordingly reduced plaintiff's attorney's hourly rate to $450.

Judge Ware rejected plaintiff's argument that he must apply current local market attorney rates to all past time spent on the case to account for the attorney's delay in payment.  The court relied on Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008) for the proposition that district courts may not apply a "de facto policy" of applying a certain fixed rate across the board to all "civil rights" cases.  The court interpreted the Moreno decision to not require mandatory calculation of attorney's hourly rates. 

The court then turned to the reasonableness of plaintiff's attorney hours expended.  Judge Ware scrutinized plaintiff's counsel's invoice evidence and cut attorney hours expended on (1) clerical work, (2) preparation of several case management statements, (3) pleadings in support of and opposing motions for summary judgment, (4) plaintiff's ADR confidentiality violation disputes, and (5) block billed entries.  Judge Ware liberally cut plaintiff's counsel's invoices anywhere he deemed "grossly excessive" in time expended.

Judge Ware denied plaintiff's Ninth Circuit fee application outright, holding that the Ninth Circuit remand was only a procedural victory that did not constitute a success on the merits, as the Ninth Circuit only held that the district court had "erred in application" of the law, which Judge Ware characterized as purely procedural because the substantive outcome of defendants' summary judgment may be adverse to plaintiff on the court's second review.

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This opinion may be cited as precedent now.  The result in this case could change, however, if a subsequent petition for rehearing or a petition for certiorari to the United States Supreme Court is granted.

This and other case bulletins, as well as other publications of Gordon & Rees LLP, may be found at www.gordonrees.com

 

ERISA

Jordan S. Altura


ERISA
Insurance

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