Barboza v. Cal. Ass'n of Prof'l Firefighters
| Decision Date | 02 June 2016 |
| Docket Number | No. 2:08-cv-0519-KJM-EFB,2:08-cv-0519-KJM-EFB |
| Court | U.S. District Court — Eastern District of California |
| Parties | DAVID BARBOZA, Plaintiff, v. CALIFORNIA ASSOCIATION OF PROFESSIONAL FIREFIGHTERS, et al., Defendants. |
David Barboza brought this action under the Employees Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. Judgment was recently entered following a third round of dispositive cross-motions. Barboza now seeks attorneys' fees. As explained below, the motion is GRANTED IN PART.
The parties do not dispute the basic factual and procedural underpinnings of this case. See Mot. Fees 2-6, ECF No. 177; Opp'n 1 & n.1, ECF No. 180. The following summary is drawn from the court's previous orders. ECF Nos. 103,1 172.2
David Barboza was a firefighter for the City of Tracy, California. In 2006, the City placed him on disability retirement as a result of a back injury and peripheral neuropathy in his legs. A few months later, he filed a claim for disability benefits under the California Association of Professional Firefighters (CAPF) Long Term Disability Plan (the Plan), which claim was eventually denied in 2007 because the Plan had no documentation of his disability. Barboza filed an administrative appeal, and the Plan's administrative body held a hearing. Two weeks after the hearing, before the appeal was decided, Barboza filed his complaint in this case.
About six weeks after Barboza's complaint was filed, his administrative appeal was decided. CAPF reversed the previous denial of benefits but reduced Barboza's award by an amount equal to one year of his pay. In reaching this decision, it cited Plan provisions that impose "offsets" or deductions on benefits when the participant waives or forfeits pay that he or she would otherwise have been eligible to receive from a third-party source. In Barboza's case, CAPF found Barboza had waived or forfeited pay he was entitled to receive under section 4850 of the California Labor Code.3
After the Plan issued its decision on appeal, Barboza settled a workers' compensation claim with the City of Tracy and received $18,000. He did not notify the defendants of this settlement. Neither did he notify the defendants he owned an alpaca ranch, worked intermittently for a digital media company and a railroad, and had other self-employment income.
The defendants answered Barboza's federal complaint, and the parties filed cross motions for judgment on the administrative record. The defendants advanced four principal arguments. First, they argued Barboza had not exhausted his administrative remedies. Second, they argued that should the case nonetheless go forward, the correct standard of review was for abuse of discretion. Third, the defendants argued they had discretion to reduce or offset Barboza's benefits by the amounts he would have received under section 4850. And fourth, the defendants argued they were entitled to reduce Barboza's award by the $18,000 he received in the settlement of his workers' compensation claim.
In mid-2009, the court granted the defendants' motion and denied Barboza's motion. The court found Barboza had not exhausted his administrative remedies and therefore did not reach the merits of his case. Barboza appealed the order to the Ninth Circuit, and in mid-2011, the circuit court reversed in a published opinion, concluding Barboza's administrative remedies were deemed exhausted. See generally Barboza v. Cal. Ass'n Prof'l, Firefighters, 651 F.3d 1073 (9th Cir. 2011). The case was remanded for litigation on the merits.
The parties undertook discovery, and in January 2012, the defendants requested leave to file an amended counterclaim. They had learned about Barboza's alpaca ranch, self-employment income, and income from the media company and railroad during discovery, and sought leave to assert claims for equitable relief. See 29 U.S.C. § 1132(a)(3)(B). The court granted the motion. The counterclaim asserted the defendants' right to an equitable lien on Barboza's self-employment and other undisclosed earnings.
Following discovery, in April 2012, the parties filed cross-motions for summary judgment. With the exception of the defendants' counterclaim, these motions addressed substantially the same points and arguments as in the parties' pre-appeal motions. After a hearing, in September 2012, the court granted and denied the motions in part. First, the court held that the correct standard of review was abuse of discretion. Second, the court held that CAPF had not abused its discretion by reducing Barboza's benefits by the amount of pay he could have received under section 4850, had he applied for it. The court also reduced Barboza's award by the $18,000 he had received in the settlement of his workers' compensation claim. Third, thecourt rejected the defendants' argument that they were entitled to an equitable lien on the entirety of Barboza's gross self-employment income, but granted an equitable lien on the approximately $1,200 he had earned during his employment with the media company and railroad. Fourth, the court denied Barboza's motion for statutory penalties under ERISA. Fifth, the court granted Barboza's motion for injunctive relief and ordered Barboza to comply with the Ninth Circuit's 2011 opinion. The parties filed cross-appeals.
The parties also both requested attorneys' fees. The court denied the motions, finding that although the parties had each achieved some degree of success on the merits of their claims, neither had acted in bad faith, neither had enjoyed significantly greater success than the other, and an award of fees would not properly deter any future wrong. Later, in addition to requesting fees, defendants asked the court to reconsider its decision to grant Barboza injunctive relief and requested the judgment be amended accordingly. They argued injunctive relief was unnecessary because the Plan had brought its practices within the bounds of the Ninth Circuit's 2011 opinion. The court denied the motion on the absence of admissible evidence showing injunctive relief was unnecessary. Both parties appealed the court's decision on fees, and the defendants appealed the decision on injunctive relief.
The Ninth Circuit issued a memorandum disposition in late 2014. See Barboza v. California Ass'n of Prof'l Firefighters, 594 F. App'x 903 (9th Cir. 2014). First, the circuit court found this court had not erred by reviewing the administrative decision for an abuse of discretion. Second, it held this court had "erred in holding that the Plan was entitled to set off a full year of section 4850 benefits against Barboza's benefit award." Id. at 906. It identified an unresolved question of fact "as to whether the Plan required Barboza to retire in a manner that would entitle him to a full year of section 4850 benefits," id.; however, the circuit court affirmed this court's finding that the defendants had not abused their discretion by offsetting Barboza's benefits by the amount of his workers' compensation settlement. Third, the circuit found this court had not erred by holding Barboza's other income could offset his benefits only in the amount of his net earnings, not his gross earnings. Fourth, the circuit affirmed this court's decision not to award statutory penalties under ERISA. Fifth, the circuit court vacated this court's injunction, findingits 2011 decision rendered that relief moot. And finally, the circuit court found this court had not abused its discretion in denying both parties' motions for attorneys' fees.
The case was remanded to this court on two issues: (1) "whether the Plan required Barboza to retire in a manner that would entitle him to a full year of section 4850 benefits"; and (2) whether Barboza's request for prejudgment interest would be granted and in what amount. The parties filed cross-motions for summary judgment on these issues, and the court issued an order in late 2015. First, the court found the parties agreed that the Plan instruments neither directly nor impliedly required Barboza to retire in a manner that would entitle him to a full year of pay under section 4850. The court therefore found that the defendant's decision to offset this pay was an abuse of discretion and granted Barboza summary judgment to that extent. Second, the court awarded Barboza prejudgment interest at a rate of 5 percent, the rate he requested, in light of the fact that the interest rates he actually paid on a home equity line of credit to cover his expenses were significantly higher than the rate prescribed by 28 U.S.C. § 1961. The defendants appealed this decision, and the appeal remains pending.
Barboza filed this motion for attorneys' fees on December 15, 2015. Mot. Fees, ECF No. 177. The defendants opposed the motion, ECF No. 180, and Barboza replied, ECF No. 184. The matter was submitted for decision without a hearing. After Barboza's reply brief was filed, the defendants filed evidentiary objections and moved to strike portions of the declarations attached to the plaintiffs' reply brief. Mot. Strike, ECF No. 185. Barboza responded. Opp'n Strike, ECF No. 186. Neither party suggests the court should delay its order on this motion until the appeal of its November 2015 order is resolved.
In most ERISA cases, the court may award a reasonable attorney's fee and costs to either party. 29 U.S.C. § 1132(g)(1); Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 244 (2010). One who claims a fee under § 1132(g)(1) need not be the prevailing party; rather, "some degree of success on the merits" will do. Hardt, 560 U.S. at 255. A litigant achieves this goal "if the court can fairly call the outcome of the litigation some success on the merits without conducting a 'lengthy inquir[y] into the question whether a particular party's success wassubstantial or occurred on a central issue.'" Id. (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 688 (1983)) (alterations in Hardt). "Trivial"...
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