Trustees of Const. v. Redland Ins. Co.
| Decision Date | 30 August 2006 |
| Docket Number | No. 04-16380.,04-16380. |
| Parties | TRUSTEES OF the CONSTRUCTION INDUSTRY AND LABORERS HEALTH AND WELFARE TRUST; Trustees of the Construction Industry and Laborers Joint Pension Trust; Trustees of the Construction Industry and Laborers Vacation Trust; Trustees for the Southern Nevada Laborers Local 872 Training Trust, Plaintiffs-Appellants, v. REDLAND INSURANCE COMPANY; Lake Mead Constructors, a joint venture between Kiewit Western Co., a Delaware corporation, and Gilbert Western Corp.; American Motorists Insurance Company, Defendants-Appellees, v. Summit Landscape Companies, Inc., a California corporation; South Shores Residential and Commercial Development Corp., a California corporation, Defendants-Third-Party-Plaintiffs-Appellees, v. Laborers International Union of North America Local 872; Jose Juan Cruz; Herbiberto Marin Garcia; Arturo P. Gonzales; Jesus C. Gonzales; Raul Gutierrez, Jr.; Jose Luis Jauregui-R; Deron C. Johnson; Diaz Edgar Lopez; Pedro Martinez-Diaz; Orthon Medina; Sergio Robles-Cabanilla; Jose Ruiz-Medina; Ignacio Medina Ruiz; Manuel Quintero; Pablo Cardenas-Manzano Armando Castro; Alejandro Corona; Sean Fowler; Victor Gillen; Adam Jacome; Alvaro Jacome; Maris Linares-Balanos, Third-Party-Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Adam P. Segal and Michael A. Kristof, Schreck Brignone Godfrey, Las Vegas, NV, for the appellants.
Gregory E. Smith, Smith & Kotchka, Las Vegas, NV; Thanh Nguyen, the Rodarti Group, Aliso, Viejo, CA; Eric A. Stovall, Reno, NV; Jonathan E. Van Cleave, Irvine, CA, and John P. Carpenter, Lake Mead Constructors, Omaha, NE, for the appellees.
Joseph A. Cardella & Thanh Nguyen, the Rodarti Group, Aliso Viejo, CA, and Brent Carson, Winner & Carson, Las Vegas, NV, for the third-party plaintiffs-appellees.
Gregory E. Smith, Smith & Kotchka, Las Vegas, NV, and Jonathan E. Van Cleave, Irvine, CA, for the third-party defendants-appellees.
Appeal from the United States District Court for the District of Nevada; Roger L. Hunt, District Judge, Presiding. D.C. No. CV-02-00877-RLH.
Before: RYMER, W. FLETCHER, and CLIFTON, Circuit Judges.
Plaintiffs/Appellants ("the Joint Trustees") prevailed in an action to collect delinquent benefit contributions owed to trusts established under the Employee Retirement Income Security Act ("ERISA"). The Joint Trustees then sought an award of "reasonable attorney's fees and costs of the action" under ERISA pursuant to 29 U.S.C. § 1132(g)(2)(D). The district court granted some of the requested fees, but it refused to allow any recovery for work performed by non-attorneys such as law clerks and paralegals. It also refused to allow any recovery for expenses incurred in the course of the litigation. The Joint Trustees appeal the district court's refusal to award these fees. We reverse and remand.
On February 12, 2004, the district court granted the Joint Trustees' motion for summary judgment under 29 U.S.C. § 1145 for unpaid benefit contributions on behalf of nonunion employees. Because the Joint Trustees had prevailed on the merits of their claim, the court held that they were entitled to "reasonable attorney's fees and costs" under 29 U.S.C. § 1132(g)(2)(D).
The Joint Trustees initially requested attorney's fees and costs totaling $51,907.04. However, the district court found that the Joint Trustees had failed to provide "sufficient information to determine whether the requested attorney's fees and costs are reasonable" under the twelve-factor test set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975). The court therefore ordered the Joint Trustees to provide "an affidavit including this information, as well as any additional information [they] deem germane to the Court's determination of reasonableness under the Kerr factors[.]"
The Joint Trustees submitted new affidavits in support of their request for attorney's fees and costs, now for a total amount of $55,064.88.1 One affidavit specified that their fees were calculated according to "normal billing rates," as follows:
STAFF RATE
Partner $245.00
Associate $120.00-185.00
Law Clerk $110.00
Legal Assistant $ 70.00-100.00
Litigation Clerk $ 40.00
An additional affidavit specified the total number of hours billed, the hourly rate for each employee, and a "brief summation" of the work performed. The additional affidavit also specified litigation expenses, which it characterized as costs. These expenses were charges for "electronic legal research, postage, photocopies, courier services, facsimile charges, long distance phone charges, and court reporter services."
The district court declined to award fees for any of the work performed by non-attorneys. It wrote, "[T]he Court finds that Plaintiffs' attorney's fees are unreasonable to the extent that they include the billings of law clerks, paralegals, and other non-attorneys, and accordingly reduces Plaintiff's attorney's fees to $29,131, or that amount of service actually performed by attorneys[.]" The court also declined to award fees for any of the specified expenses.
The Joint Trustees appeal. For the reasons that follow, we agree with the Joint Trustees.
"This court reviews de novo any elements of legal analysis and statutory interpretation involved in an attorney fees decision." Associated Gen. Contractors v. Smith, 74 F.3d 926, 931 (9th Cir.1996). Where ERISA has been correctly interpreted, "[w]e review a district court's award of mandatory attorneys' fees pursuant to § 1132(g)(2)(D) according to the deferential, clearly erroneous standard." Parkhurst v. Armstrong Steel Erectors, Inc., 901 F.2d 796, 799 (9th Cir.1990); see also Lads Trucking Co. v. Bd. of Trs. of the W. Conference of Teamsters Pension Trust Fund, 777 F.2d 1371, 1373 (9th Cir. 1985).
ERISA provides for the mandatory award of attorney's fees to pension plans in successful actions to collect delinquent contributions owed under 29 U.S.C. § 1145. Lads Trucking, 777 F.2d at 1373-74. In the words of the statute,
In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which judgment in favor of the plan is awarded, the court shall award the plan —
....
(D) reasonable attorney's fees and costs of the action, to be paid by the defendant ...
29 U.S.C. § 1132(g)(2)(D).
As we construe its order, the district court ruled as a matter of law under § 1132(g)(2)(D) that attorney's fees are not available to compensate for work performed by non-attorneys such as law clerks and paralegals. The district court erred in so ruling.
In Missouri v. Jenkins, 491 U.S. 274, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989), the Supreme Court held that a "`reasonable attorney's fee' provided for by statute should compensate the work of paralegals, as well as that of attorneys." Id. at 285, 109 S.Ct. 2463. The Court reasoned,
Clearly, a "reasonable attorney's fee" cannot have been meant to compensate only work performed personally by members of the bar. Rather, the term must refer to a reasonable fee for the work product of an attorney. Thus, the fee must take into account the work not only of attorneys, but also of secretaries messengers, librarians, janitors, and others whose labor contributes to work product for which an attorney bills her client; and it must also take account of other expenses and profit.
Id. If the attorney's hourly rate already incorporates the cost of work performed by non-attorneys, then courts should not compensate for these costs as an additional "reasonable attorney's fee." The key, wrote the Court, is the billing custom in the "relevant market." Id. at 288, 109 S.Ct. 2463. Thus, fees for work performed by non-attorneys such as paralegals may be billed separately, at market rates, if this is "the prevailing practice in a given community." Id. at 287, 109 S.Ct. 2463. Indeed, even purely clerical or secretarial work is compensable if it is customary to bill such work separately, id. at 287, 109 S.Ct. 2463 n. 9, though such tasks "should not be billed at the paralegal rate, regardless of who performs them." Id. at 288, 109 S.Ct. 2463 n. 10. The principle established in Jenkins harnesses "the discipline of the market" to ensure that attorneys recover only those costs that are not already built into their hourly fees. Id. at 287, 109 S.Ct. 2463 n. 9.
On remand, the district court may properly insist that the Joint Trustees show that it is the custom in the relevant community to bill separately for work performed by the non-attorneys at issue, and that the Joint Trustees "produce[ ] satisfactory evidence, in addition to the affidavits of[their] counsel, that the requested rates are in line with those prevailing in the community for similar services of lawyers of reasonably comparable skill and reputation." Jordan v. Multnomah County, 815 F.2d 1258, 1263 (9th Cir.1987). The district court should "provide a concise but clear explanation of its reasons for the fee award." Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); see also D'Emanuele v. Montgomery Ward & Co., 904 F.2d 1379, 1384-86 (9th Cir.1990) ().
The Joint Trustees contend that their specified expenses, which they have characterized as costs in their affidavit, are part of "reasonable attorney's fees" under § 1132(g)(2)(D). It is well established that attorney's fees under 42 U.S.C. § 1988 include reasonable out-of-pocket litigation expenses that would normally be charged to a fee paying client, even if the court cannot tax these expenses as "costs" under 28 U.S.C. § 1920.2 See, e.g., Harris v. Marhoefer, ...
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