Plaintiffs seek an award of fees and expenses

Federal District Court Opinions

LOCAL 22 INT. B. OF ELECTRICAL WORKERS v. SADLER ELEC., (Neb. 12-5-2006) LOCAL 22 INTERNATIONAL BROTHERHOOD OF ELECTRICAL W ORKERS, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION NO. 22 AND NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION HEALTH AND WELFARE TRUST FUND, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION NO. 22 PENSION FUNDS A & B, OMAHA BROTHERHOOD OF ELECTRICAL WORKERS LOCAL NO. 22 VACATION-HOLIDAY TRUST FUND, OMAHA ELECTRICAL JOINT APPRENTICESHIP AND TRAINING TRUST FUND, IBEW LOCAL 22/NEBRASKA NECA LABOR MANAGEMENT COOPERATION COMMITTEE, NATIONAL ELECTRICAL BENEFIT FUND, NATIONAL LABOR-MANAGEMENT COOPERATION FUND, TRUSTEES OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION NO. 22/N.E.C.A. HEALTH AND WELFARE TRUST FUND, TRUSTEES OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION NO. 22 PENSION FUNDS A & B, TRUSTEES OF THE OMAHA BROTHERHOOD OF ELECTRICAL WORKERS LOCAL NO. 22 VACATION-HOLIDAY TRUST FUND, TRUSTEES OF THE OMAHA ELECTRICAL JOINT APPRENTICESHIP AND TRAINING TRUST FUND, and TRUSTEES OF THE NATIONAL ELECTRICAL BENEFIT FUND,
Plaintiffs, v. SADLER ELECTRIC, INC., Defendant. CASE NO. 8:05CV523. United States District Court, D. Nebraska. December 5, 2006

MEMORANDUM AND ORDER ON ATTORNEYS’ FEE AWARD

LAURIE CAMP, District Judge Page 2

This matter is before the Court on the Plaintiffs’
Application for an award of attorneys’ fees, expenses and
costs.[fn1] Plaintiffs seek an award of fees and expenses
in the amount of $43,401.94 pursuant to the Employment
Retirement Income Security Act, specifically, 29 U.S.C.
§ 1132(g)(2). (Filing No. 40). Defendant Sadler
Electric, Inc. opposes the application for fees and
expenses on the basis that the amount requested by the
Plaintiffs is not reasonable. (Filing No. 41, 42).

Background of the Case

The parties agreed to resolve several of the outstanding
issues in this case before the Court resolved the
Plaintiffs’ summary judgment motion. Sadler Electric agreed
that it was liable to the Plaintiffs for the following:

• $9,229.20 in delinquent contributions and dues;
• $1,008.92 in liquidated damages; and
• $2,722.67 in accrued interest.

The only substantive issue decided by the Court on the
Plaintiffs’ motion for summary judgment was whether Sadler
Electric was required by contract to reimburse the
Plaintiffs for the expenses in the amount of $6,242,
related to the audit that revealed the delinquent
contributions and dues. Plaintiffs were invited to file an
application for attorney fees. Final judgment was entered
in favor of the Plaintiffs in the amount of $19,202.79,
which included the stipulated amounts and the audit
expenses. Page 3

Attorneys’ Fee

Since 2002, the Court of Appeals for the Eighth Circuit
has recognized that there is no presumption in favor of
awarding attorney fees to a prevailing party in an ERISA
case. In so doing, the Eighth Circuit Court distinguished
the purpose of ERISA, protecting economic rights, from the
purpose of the civil rights laws, protecting constitutional
rights and favoring the award of attorney’s fees under a
private-attorney-general theory. See Martin v. Arkansas
Blue Cross & Blue Shield, 299 F.3d 966, 972 (8th Cir. 2002)
(en banc). The Eighth Circuit Court has stated that “a
district court considering a motion for attorney’s fees
under ERISA should . . . apply its discretion consistent
with the purposes of ERISA, those purposes being to protect
employee rights and to secure effective access to federal
courts.” Starr v. Metro Systems, Inc., 461 F.3d 1036,
1040-1041 (8th Cir. 2006) citing Welsh v. Burlington N.,
Inc., Employee Benefits Plan, 54 F.3d 1331, 1342 (8th Cir.
1995).

In exercising its discretion, a trial court should consider
the following factors:

(1) the degree of culpability or bad faith of the
opposing party; (2) the ability of the opposing party to
pay attorney fees; (3) whether an award of attorney fees
against the opposing party might have a future deterrent
effect under similar circumstances; (4) whether the
parties requesting attorney fees sought to benefit all
participants and beneficiaries of a plan or to resolve a
significant legal question regarding ERISA itself; and (5)
the relative merits of the parties’ positions.

Martin, 299 F.3d at 969 & n. 4 (citing Lawrence v.
Westerhaus, 749 F.2d 494, 495-96 (8th Cir. 1984) (per
curiam)). These factors are non-exclusive guidelines that
should not be mechanically applied. Id. at 972; Starr, 461
F.3d at 1041.

ERISA’s purpose is to protect “the interests of
participants in employee benefit plans and their
beneficiaries.” 29 U.S.C. § 1001(b). I have
considered the factors, and I Page 4 conclude that the
purposes supporting ERISA will be served by an award of
fees to the Plaintiffs. While I find no particular bad
faith on the part of Sadler Electric, statements made by
its president, Robert Sadler, in his deposition reflected
an attitude of entrenchment regarding the litigation. I
surmise that an award of attorneys fees against Sadler
Electric in this instance may encourage it and other
employers who are parties to these multi-employer plans to
pay promptly any delinquencies that are discovered by
regular audits. I find that the Plaintiffs’ position on the
merits was very strong, and that it appears that there was
little, if any, genuine dispute that Sadler Electric owed
the delinquent contributions to the plans. Moreover, it
appears that Sadler Electric had the ability to pay the
delinquencies months before the judgment was entered, and
that the dispute relating to attorneys fees may have been
the primary reason for the parties’ inability to resolve
the matter on their own. (Filing No. 45, Stapp and Henry
Affidavits). There is no evidence that Sadler Electric is
unable to pay an award. Clearly, the damages awarded to
Plaintiffs will inure to the benefit of all participants
and beneficiaries, and I observe that the vigilance with
which the Plaintiffs sought enforcement of their rights
supports the purpose of ERISA. For all these reasons, I
conclude that the factors set forth in Martin and
Westerhaus weigh in favor of awarding attorney fees in this
case.

The law requires that the fees awarded be reasonable, and
so I now consider the requested fee under the lodestar
method. See Brown v. Aventis Pharmaceuticals, Inc., 341
F.3d 822, 829 (8th Cir. 2003). The lodestar “is calculated
by multiplying the number of hours reasonably expended by
the reasonable hourly rates.” Fish v. St. Cloud State
University, 295 F.3d 849, 851 (8th Cir. 2002). “When
determining reasonable hourly rates, Page 5 district
courts may rely on their own experience and knowledge of
prevailing market rates.” Hanig v. Lee, 415 F.3d 822, 825
(8th Cir. 2005) citation omitted.

The same attorneys from one law firm, Blake & Uhlig, P.A.,
located in Kansas City, Kansas, represented all the
Plaintiffs. The Plaintiffs seek a total of $40,160.34 for
their professional legal services (representing 229.51
attorney hours and 9.65 paralegal hours), and $3,246.07 in
non-taxable expenses. The firm’s statement for professional
legal services, attached to the affidavit of lead counsel
Michael Stapp (Filing No. 40, Affidavit of Michael Stapp,
Ex. A, pp. 7-58), is actually six separate billing
statements prepared for each one of the six Plaintiffs in
the case. (See, e.g., Stapp Aff., Exhibit A, for IBEW Local
No. 22, pp. 7-9; NECA Pension Plan A, pp. 10-16; NECA
Pension Plan B, pp. 17-24; NECA Health and Welfare, pp.
24-30; IBEW Local 22 Apprentice, pp. 31-38; NEPF pp.
39-44). Stapp explains that the billing statements
represent amounts that have been billed or will be billed
to the Plaintiffs. He also explains that the attorneys’
flat billing rate for the local union was set at a lower
rate than the billing rate for the plans and funds,
respectively $140 and $145 for the union compared to $175
and $180 for the plans and funds. (Stapp Aff. § 6.)

The Defendant objects to the total number of hours recorded
by Plaintiffs, 229.51 attorney hours and 9.65 paralegal
hours, as excessive, duplicative, and redundant, and to the
attorneys’ hourly rates as too high. The Defendant objects
to the lack of explanatory detail in some of the billing
descriptions, and challenges the hourly rates as too high.

Plaintiffs’ Application reflects its counsel’s apparent
decision to bill separately each client for the whole of the
work performed in this matter (or nearly so), rather than
to divide the time that counsel spent to achieve the
Plaintiffs’ common goal and bill only a portion Page 6 of
that time to each Plaintiff.[fn2] The law firm’s approach
may be permissible, but it results in redundant billing
that I conclude should not be assessed against the
Defendant.

In order to alleviate the unfair effect of this redundancy
on the Defendant, I have considered each of the six
separate billing statements. The six separate billing
statements are not identical, although most of entries on
each statement duplicate entries on other statements. I
observe that nearly all of the entries made on the other
five statements also are contained in the statement for
NECA Pension Plan A. The billing statement for the NECA
Pension Plan A reflects the highest number of hours, billed
and unbilled, recorded for any one of the six Plaintiffs at
66.35 hours. (Id. pp. 10-15). I found fewer than five hours
were contained on one or more of the other five billing
statements that were not also included on the NECA Pension
Plan A statement. In an attempt to include all hours
actually worked on behalf of any and all Plaintiffs by
Blake & Uhlig legal professionals in the analysis, I will
use the hours recorded on the NECA Pension Plan A
statement, 66.35 plus five more hours, for a total of 71.35
hours, as representing the total number of hours spent in
the prosecution of this matter.

I have considered the appropriateness of the delegation of
the work by and between the litigation team members and
find it appropriate. The less experienced attorney
performed the greatest percentage of the work under the
supervision of the more experienced attorney. I agree that
the statements reflect more or longer attorney Page 7
conferences than would normally be expected for a case of
this limited complexity, and it appears that some of that
excessiveness may be due to the fact that Attorney Fletcher,
a relatively inexperienced attorney, was performing most of
the work under the supervision of Attorney Stapp. Thus, the
attorney conference hours likely include some mentoring and
training hours for which clients and opposing counsel
should not be responsible. Because I have decided, as
explained below, to uphold the blended hourly rate, I will
reduce the hours reflected on the NECA Pension Plan A bill
by 10 percent to reflect the excessive time spent by the
attorneys in conference.

In response to Defendant’s argument that the billing
entries lack detailed descriptions, I found few entries
lacking sufficient detail, and not enough of them to reduce
the number of hours reasonably expended on that basis. I am
not inclined to reduce further the number of hours
reasonably expended based in part on the evidence provided
by Plaintiffs that revealed the parties’ substantial
agreement on all issues, except attorney fees, months
before the summary judgment motion was determined. Remarks
made by Sadler Electric’s president in the heat of
litigation likely discouraged agreement on the attorney fee
issue. For all these reasons, I conclude that the number of
hours reasonably expended on the issues in this case is
64.25 (roughly 71.35, reduced by 10 percent for excessive
attorney conferencing).[fn3] Page 8

Having determined the number of hours reasonably expended,
I turn to the reasonableness of the hourly rates. The case
was handled primarily by two attorneys,[fn4] which appears
to be appropriate and efficient staffing. Attorney Michael
Stapp has been an attorney with Blake and Uhlig for 23
years, during which time he has handled dozens of matters
relating to labor unions and employee benefit plans. He is
identified as attorney number 9 on the billing statements.
(Filing Nos. 40; and 45, Stapp Affidavit). Attorney Lauren
Fletcher graduated from the University of Kansas Law School
in 2005, and became a member of the Missouri Bar in 2006.
She is identified as attorney number 12 on the billing
statements. (Id., Fletcher Affidavit). It appears that
Fletcher performed much of the substantive litigation work
under the supervision of Stapp, and that Stapp was
primarily responsible for supervision and settlement
negotiations. (Filing No. 40, Stapp Aff. Ex. A).

The billing statement for the NECA Pension Plan A reflects
the higher of the two sets of blended hourly rates, which
presumably were negotiated between the Plaintiffs and their
counsel. (NECA Pension Plan A was billed at the flat rate
of $175 and $180 depending on the year that the work was
performed.) Defendant argues that the $175-$180 hourly rate
is too high for a first year attorney working on an ERISA
case in this District, and Defendant offers affidavit
evidence demonstrating that the appropriate hourly rate for
a first year associate in this District on these types of
matters is between $120 and $135 per hour. Page 9

As a general proposition, I would agree that an hourly rate
of $175-180 is excessive for a first year associate.
However, it is apparent that Blake & Uhlig and their
clients in this case agreed to employ a blended hourly
rate. A blended rate reflects an enhancement to the rate
charged by less experienced lawyers and a corresponding
reduction to the rate charged by more experienced lawyers.
Because it would not be unusual to award an attorney with
23 years of experience in labor and ERISA cases an hourly
rate in the range of $200-250 per hour, I conclude that a
blended hourly rate of $180 for a litigation team composed
of an attorney with a year’s experience and an attorney
with 23 years experience is reasonable. Further evidence of
the reasonableness of this rate is that five of the six
clients that Blake & Uhlig represented in this case agreed
to pay the $180 blended rate. I find no reason to deviate
from that rate.[fn5] I conclude that the blended rate of
$180 is reasonable.

Under the lodestar method, I conclude that 64.25 hours[fn6]
were reasonably expended and those should be multiplied by
the $180 blended hourly rate for a reasonable attorney fee
award of $11,565. I conclude that amount constitutes a
reasonable attorneys’ fee under the circumstances of this
case.

Non-taxable Expenses

Expert witness Gene DeBoer spent 22.75 hours at a rate of
$124 per hour (plus $16 for copying expenses) in
preparation for this case, and charged plaintiffs expert
witness fees in the amount of $2,837. Those expenses were
incurred over a period from May Page 10 through August of
2006, and included the preparation of his expert witness
report, correspondence with counsel, and the preparation of
an affidavit. Because the recovery of the audit expenses
was litigated to the end, and because there is no evidence
that the Defendant paid the delinquent contributions before
the entry of judgment, even though its liability for the
delinquencies had been, at least informally, conceded, I
will award the expert witness expenses requested.

The expenses claimed for photocopying and other document
management tasks have not been adequately identified or
distinguished from copying costs claimed in the bill of
costs. Accordingly, they are denied. The food and lodging
bill in the amount of $128.91 incurred on July 11, 2006,
appears to have been incurred in connection with the July
12, 2006, deposition of Sadler Electric’s president, which
occurred in Lincoln, Nebraska. (Filing No. 30, Ex. 12;
Filing No. 40; Holiday Inn Bill). I conclude that the
deposition was necessarily taken in the prosecution of this
matter, and that taking the deposition in Nebraska worked
to Robert Sadler’s benefit and convenience. Accordingly, I
will include in the award the non-taxable expenses the food
and lodging bill. The total non-taxable expenses awarded
are $2,965.91.

IT IS ORDERED:

Plaintiffs’ Application for Attorneys’ Fees (Filing No. 40)
is granted as follows: Defendant shall pay to the
Plaintiffs $14,530.91, representing a reasonable attorney
fee in the amount of $11,565, and non-taxable expenses in
the amount of $2,965.91.

[fn1] Costs in the amount of $1,047.60 have been assessed.
(Filing No. 47).

[fn2] The Plaintiffs do not explain the law firm’s billing
methodology. If it is the case that the individual billing
statements do not reflect that the law firm billed each of
its clients for the whole of the work performed, but
rather, that the firm billed only a proportionate share of
the whole to each client, then the fee is patently
excessive and I would be reduced it to obtain the same
result as is reached in this order.

[fn3] I expressly deny the Plaintiffs’ request to supplement
its request to include additional time spent in the
preparation of the attorney fee application.

[fn4] Two other attorneys are identified in the motion and
on the bills: Attorney Robert Henry has been admitted to
practice law in Missouri and in Nebraska since 1994, and he
has experience in these cases. He is identified as attorney
no. 11. (Filing Nos. 40; and 45, Henry Aff. § 2, 3).
It appears that Henry was only slightly involved in the
commencement of the case and in attorney conferences.
Attorney Rebecca Proctor, admitted to the Missouri Bar in
2006, covered for Attorney Fletcher for a short time. Less
than 10 hours of paralegal time was spent on the entire
case.

[fn5] The greatest percentage of the work performed in this
case was performed during 2006, when the $180 blended rate
applied, and so that it the rate I will use throughout.

[fn6] Approximately two hours recorded on the billing
statement for NECA Pension Plan A are paralegal hours.
Aware of the reduction I have taken in the hours reasonably
expended, and mindful of the discretion properly exercised
herein, I have multiplied all reasonable hours expended at
the attorney blended rate, not the paralegal rate.