Hakim v. Accenture U.S. Pension Plan

• Decision Date: 03 October 2012
• Docket Number: Case No. 08–cv–3682.
• Citation: 901 F.Supp.2d 1045
• Parties: Omar HAKIM, Plaintiff, v. ACCENTURE UNITED STATES PENSION PLAN, Accenture LLP, Accenture Inc., Accenture LLC, and Accenture Ltd., Defendants.
• Court: U.S. District Court — Northern District of Illinois

901 F.Supp.2d 1045

Omar HAKIM, Plaintiff,

v.ACCENTURE UNITED STATES PENSION PLAN, Accenture LLP, Accenture Inc., Accenture LLC, and Accenture Ltd., Defendants.

Case No. 08–cv–3682.

United States District Court,

N.D. Illinois,

Eastern Division.

Oct. 3, 2012.

Troy A. Doles, Schlichter Bogard & Denton, Matthew H. Armstrong, Armstrong Law Firm LLC, St. Louis, MO, Derrick T. Dewitt, Douglas A. Terry, Nelson, Roselius, Terry & Morton, Edmond, OK, for Plaintiff.

Ian H. Morrison, Mark A. Casciari, Barbara Holly Borowski, James Richard Beyer, Keri B. Halperin, Seyfarth Shaw LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

Before the Court are Defendant's bill of costs [202], Defendant's motion for leave to file instanter reply brief in support of bill of costs [213], and Defendant's motion for attorneys' fees[216].For the reasons set forth below, the Court denies Defendant's motion for attorneys' fees[216], but awards Defendant costs in the amount of $1,969.97.The Court also grants Defendant's motion for leave to file instanter reply brief in support of its bill of costs [213].

I.Background

In its September 29, 2011 opinion, the Court granted Defendant's motion for reconsideration of the Court's August 16, 2010 order in light of the Seventh Circuit's decision in Howell v. Motorola, Inc.,633 F.3d 552(7th Cir.2011).The Court previously had granted Defendant's motions to dismiss and for summary judgment as to all claims except for Count IV.As to that count, the Court concluded that by virtue of the anti-alienation provision of ERISA, the release that Plaintiff executed did not bar his claim for additional benefits based on alleged violations of ERISA Section 204(h).On January 21, 2011, the Seventh Circuit in Howell held that a similar release was enforceable as to an ERISA claim for additional ERISA plan benefits.Accordingly, Defendant asked the Court to reconsider its August 16 Order in light of the Howell decision.The Court did and found that, in light of the Seventh Circuit's decision in Howell, the anti-alienation provision did not apply and thus Plaintiff's claim was barred under the terms of the release that he signed.The Court dismissed Count IV and entered final judgment in favor of Defendant and against Plaintiff.After the entry of judgment in its favor, Defendant filed a Bill of Costs, seeking an award in the amount of $11,055.13.Defendant also requests attorneys' fees in the amount of $1,214,253.00.Plaintiff objects to both requests.

II.AnalysisA.Applicable Standard

Defendant seeks costs pursuant to 28 U.S.C. § 1920andFederal Rule of Civil Procedure 54(d)(1) and attorneys' fees pursuant to 29 U.S.C. § 1132(g).Plaintiff maintains that 29 U.S.C. § 1132(g)(1), not Rule 54(d), supplies the correct standard for analyzing the availability of both costs and fees in the ERISA context.With respect to fees, § 1132(g) clearly governs.As the Court sets forth below, in regard to costs, the answer is hazier.

Rule 54(d)(1) provides that “[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party.”Fed.R.Civ.P. 54(d)(1).The Seventh Circuit has stated that “ERISA includes such an express provision”( Nichol v. Pullman Standard, Inc.,889 F.2d 115, 121(7th Cir.1989)), as § 1132(g)(1) of the ERISAstatute explicitly provides that “[i]n any action under this subchapter * * * by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party.”29 U.S.C. § 1132(g)(1).Thus, the Seventh Circuit's statement in Nichol suggests that courts apply § 1132(g)(1), rather than Rule 54(d), in determining whether an ERISAparty should be awarded costs.This distinction presumably is material because the Seventh Circuit has recognized only two situations in which the denial of costs under Rule 54(d) might be warranted (the first involves misconduct of the party seeking costs and the second involves a pragmatic exercise of discretion to deny or reduce a costs order if the losing party is indigent)( Mother & Father v. Cassidy,338 F.3d 704, 708(7th Cir.2003);Rivera,469 F.3d at 634–35)), while district courts appear to enjoy broader discretion under § 1132(g)(1).SeeNichol,889 F.2d at 121(stating that declining “to award attorneys' fees and costs to ERISAdefendants, even prevailing defendants, would rarely constitute an abuse of discretion”)(internal quotation marks omitted);see alsoJackman Fin. Corp. v. Humana Ins. Co.,641 F.3d 860, 866(7th Cir.2011)(recognizing that § 1132(g)(1) creates a presumption in favor of awarding costs and fees to the prevailing party, but characterizing that presumption as “modest” and “rebuttable”);Hess v. Reg–Ellen Mach. Tool Corp.,367 Fed.Appx. 687, 690(7th Cir.2010).In other words, Rule 54(d)and§ 1132(g) differ on the degree to which an award of costs is presumptive.A court's discretion to deny costs under Rule 54(d) is subject to a “strong presumption that the prevailing party will recover costs.”Mother & Father v. Cassidy,338 F.3d 704, 708(7th Cir.2003).On the other hand, § 1132(g)(1)provides that a court“ may allow a reasonable attorney's fee and costs of action to either party.”29 U.S.C. § 1132(g)(1)(emphasis added).While the Seventh Circuit has recognized that § 1132(g)(1) creates a presumption in favor of awarding costs and fees to the prevailing party, the court has characterized that presumption as “modest” and “rebuttable.”Hess v. Reg–Ellen Mach. Tool Corp.,367 Fed.Appx. 687, 690(7th Cir.2010);see alsoJackman Fin. Corp. v. Humana Ins. Co.,641 F.3d 860, 866(7th Cir.2011).How the differences actually shake out in application remains to be seen, but on their face, the two standards appear to differ in degree.

In the face of these competing standards, a split exists among district judges as to whether, consistent with Nichol, costs in an ERISA action are governed by 29 U.S.C. § 1132(g)(1) or whether Rule 54(d)(1) supplies the relevant standard in the ERISA context as well.SeeLingis v. Motorola, Inc.,868 F.Supp.2d 771, 773–74(N.D.Ill.2012)(concluding that ERISA § 1132(g)(1) governs the award of costs and sustaining plaintiffs' objections to award of cost);George v. Kraft Foods Global, Inc.,2010 WL 1976826, at *1–2(N.D.Ill.May 24, 2010)(“It is equally evident that Section 1132(g)(1) supplants Rule 54(d)(1) as the standard governing whether to award costs to a prevailing party in ERISA lawsuits.”);Brieger v. Tellabs, Inc.,652 F.Supp.2d 925, 926(N.D.Ill.2009)(concluding that ERISA § 1132(g)(1) governs the award of costs and applying Rule 54 would be contrary to the plain language of both Section 1132(g)(1)andRule 54(d)(1));Keach v. U.S. Trust Co.,338 F.Supp.2d 931, 934(C.D.Ill.2004)(adopting plaintiff's position that “awards of costs are governed by the discretionary language of 29 U.S.C. § 1132(g)(1), rather than the presumptive standard of Rule 54(d)”);but seeRogers v. Baxter Int'l, Inc.,2011 WL 941188(N.D.Ill.Mar. 16, 2011)(finding sufficient discretion in both Rule 54(d)and§ 1132(g)).Furthermore, the Seventh Circuit has stated recently that it “has never grappled directly with the subject, and it is not appropriate to read oblique remarks as answering a question not squarely posed.”Loomis v. Exelon Corp.,658 F.3d 667, 674(7th Cir.2011).In Loomis, the Seventh Circuit did not resolve the issue, but noted that only one Court of Appeals has accepted the argument that “ § 1132(g)(1) does not ‘provide otherwise’ than Rule 54(d) because [§ 1132(g)(1) ] never forbids an award of costs.”Id. at 674(citingQuan v. Computer Sciences Corp.,623 F.3d 870, 888–89(9th Cir.2010)).The court was skeptical of the Ninth Circuit's conclusion, observing that even if a statute did not forbid an award to the prevailing party, the statute would “be otherwise” if it “established a presumption against an award of costs,” in contrast to Rule 54(d)'s presumption in favor of such an award, or if the statute established the opposite presumption, in favor of the winner paying the loser's costs.Id.Despite the court's skepticism, it did not resolve the issue, leaving district courts with Nichol as the decision that most directly addresses the issue.SeeNichol,889 F.2d at 121(observing that § 1132(g)(1) is “such an express provision”).

The Seventh Circuit and district courts have not applied the Nichol precedent consistently.In several cases, courts have applied Rule 54(d) to ERISA actions without discussing whether § 1132(g)(1) displaces Rule 54(d).See, e.g., White v. Sundstrand Corp.,256 F.3d 580, 585–86(7th Cir.2001);McIlveen v. Stone Container Corp.,910 F.2d 1581, 1584(7th Cir.1990).This Court too has applied Rule 54(d) without considering whether § 1132(g)(1) provides the appropriate standard.SeeHolmstrom v. Metropolitan Life Ins. Co.,2011 WL 2149353, at *7–8(N.D.Ill.May 31, 2011).In other cases, the Seventh Circuit has applied § 1132(g)(1) without analyzing its relationship to Rule 54(d).See, e.g., Bowerman v. Wal–Mart Stores, Inc.,226 F.3d 574, 592–93(7th Cir.2000);Little v. Cox's Supermarkets,71 F.3d 637, 644(7th Cir.1995);Anderson v. Flexel, Inc.,47 F.3d 243, 250–51(7th Cir.1995).The court of appeals also has appeared to apply § 1132(g)(1) in affirming a district court's denial of an attorneys' fee petition, but affirmed the district court's grant of costs under Rule 54(d).SeeQuinn v. Blue Cross & Blue Shield Ass'n,161 F.3d 472, 478–79(7th Cir.1998);see alsoHecker v. Deere & Co.,556 F.3d 575, 591(7th Cir.2009)( Hecker I ), reh'g denied, 569 F.3d 708(7th Cir.2009)( Hecker II)(affirming an award of costs without referencing Rule 54(d) or § 1132(g)(1)).¹

In crafting ERISA's remedial scheme, Congress chose to provide for a private right of action, empowering plan...