Humphrey v. United Way of the Texas Gulf Coast

• Decision Date: 28 July 2011
• Docket Number: Civil Action No. H–05–758.
• Citation: 52 Employee Benefits Cas. 1427,802 F.Supp.2d 847
• Parties: Ann W. HUMPHREY, individually and on behalf of others similarly situated, Plaintiff, v. UNITED WAY OF the TEXAS GULF COAST, a Texas non-profit corporation, and United Way of the Texas Gulf Coast Cash Balance Plan, Defendants.
• Court: U.S. District Court — Southern District of Texas

52 Employee Benefits Cas. 1427

802 F.Supp.2d 847

Ann W. HUMPHREY, individually and on behalf of others similarly situated, Plaintiff,

v.UNITED WAY OF the TEXAS GULF COAST, a Texas non-profit corporation, and United Way of the Texas Gulf Coast Cash Balance Plan, Defendants.

Civil Action No. H–05–758.

United States District Court, S.D. Texas, Houston Division.

July 28, 2011.

Derek D. McLeod, Eva T. Cantarella, Bradley J. Schram, Robert P. Geller, Hertz Schram PC, Bloomfield Hills, MI, William H. Bruckner, Bruckner Burch PLLC, Houston, TX, for Plaintiff.

Mark S. Miller, Melinda Rich Harper, Reagan M. Brown, Fulbright & Jaworski LLP, Houston, TX, for Defendants.

OPINION AND ORDER

MELINDA HARMON, District Judge.

Pending before the Court in the above referenced class action alleging unlawful reduction of pension benefits, grounded in the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001–1461, are (1) Defendants United Way of the Texas Gulf Coast and United Way of the Texas Gulf Coast Cash Balance Plan's (collectively, “United Way's”) Rule 59 motion to alter or amend the judgment, or alternatively motion for reconsideration, or alternatively motion for new trial (instrument # 180) and (2) Plaintiff/Class Representative Ann W. Humphrey's (“Plaintiff's” or “Humphrey's”) Rule 54 motion (# 179) for common-fund costs and fees and additional costs and attorneys' fees owed to Plaintiffs under ERISA § 502(g), 29 U.S.C. § 1132(g).

United Way's Rule 59 Motion

The Court entered final summary judgment in favor of Plaintiffs on December 9, 2010 (# 171), triggering the fourteen-day period for filing a motion for costs and attorneys' fees under Federal Rule of Civil Procedure 54(d).¹

A Rule 59(e) motion “calls into question the correctness of a judgment.” Templet v. HydroChem, Inc., 367 F.3d 473, 478–79 (5th Cir.2004). “A motion to alter or amend the judgment under Rule 59(e) ‘must clearly establish either a manifest error of law or fact or must present newly discovered evidence’ and ‘cannot be used to raise arguments which could, and should, have been made before the judgment issued.’ ” Rosenzweig v. Azurix Corp., 332 F.3d 854, 863–64 (5th Cir.2003) ( quoting Simon v. United States, 891 F.2d 1154, 1159 (5th Cir.1990)). It also cannot be used to re-litigate issues “that simply have been resolved to the movant's dissatisfaction.” In re Self, 172 F.Supp.2d 813, 816 (W.D.La.2001). Altering, amending or reconsidering a judgment is an extraordinary measure that should rarely be granted and only when there is (1) an intervening or change in controlling law; (2) the availability of new evidence not previously available; or (3) the need to correct a clear error of law or fact or to prevent a manifest injustice. Schiller v. Physicians Resource Group, Inc., 342 F.3d 563, 567 (5th Cir.2003). A court has considerable discretion in determining whether to reopen a case in response to a motion for reconsideration under Rule 59(e). Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 174 (5th Cir.1990), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir.1994) ( en banc ). In such a circumstance the court “must strike the proper balance between two competing imperatives: (1) finality, and (2) the need to render just decisions on the basis of all the facts.” Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 355 (5th Cir.1993). “Courts do not grant new trials unless it is reasonably clear that prejudicial error has crept into the record or that substantial justice has not been done, and the burden of showing harmful error rests on the party seeking new trial.” Sibley v. Lemaire, 184 F.3d 481, 487 (5th Cir.1999), cert. denied, 529 U.S. 1019, 120 S.Ct. 1420, 146 L.Ed.2d 312 (2000).

Arguing that manifest errors of fact or law exist in the orders and opinions that form the basis of the final judgment so that “it is reasonably clear that prejudicial error has crept into the record [and] that substantial justice has not been done,” ² Defendants object to numerous rulings made in the course of this long litigation, specifically pointing to the August 14, 2007, 2007 WL 2330933, order certifying a class (# 87); the February 19, 2008, 2008 WL 447552, order clarifying composition of the class (# 123); the March 28, 2008 Opinion and Order, 590 F.Supp.2d 837 (S.D.Tex.2008) granting Plaintiff's Motion for Summary Judgment and denying United Way's Motion for summary Judgment (# 125); the November 15, 2010 Opinion and Order overruling United Way's Objections to Humphrey's Proposed Final Judgment and Second Amended Proposed Final Judgment (# 169); and the December 9, 2010 Final Judgment (# 171).

This Court has expended extensive time and effort in addressing the issues as they were initially presented and as they have evolved over the pendency of this action. After yet another careful review, it stands by its earlier orders. Moreover the Court finds that once again Plaintiff has persuasively responded to the many rehashed and few new arguments, both legal and factual, raised in Defendants' Rule 59 motion. The Court fully concurs with Plaintiff and denies Defendants' Rule 59 motion.

Humphrey's Rule 54 Request for Common Fund Fees and Costs (# 179)

With supporting affidavits, records, and documentation, Plaintiff seeks to recover (1) common-fund costs and fees and (2) an additional award of costs and fees incurred since April 22, 2008 under ERISA § 502(g), in other words since the Court's previous November 20, 2008, 2008 WL 5070057, award (# 148, clarified # 169 at 12–13).³ Humphrey observes that ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1),⁴ allows an award of fees solely to a “party,” and therefore the attorneys did not receive the costs and fees from the court's award. Thus they now seek to recover fees and costs under the “common fund” doctrine for the entire period of this litigation and an additional award of costs and fees to Plaintiff under ERISA § 502(g)(1) just for the period since April 22, 2008.

After noting a wide variety of approaches by different courts,⁵ Humphrey urges the Court, as a “cautious and reasonable approach for determining the common fund fees in this case,” to (i) determine a reasonable benchmark percentage; (ii) adjust that percentage by applicable Johnson factors ⁶; and (iii) cross-check the percentage result by calculating the lodestar enhanced by any applicable multiplier.⁷ Relying on Theodore Eisenberg and Geoffrey P. Miller's paper, Attorneys Fees in Class Action Settlements: An Empirical Study, 1 Journal of Empirical Legal Studies 27–78 (2004) (copy attached, # 179–5), Humphrey suggests, as a reasonable benchmark in this class action, 29.8% of the benefit to the class before application of the Johnson factors. Although conceding that in Plaintiff's previous statutory fee award under ERISA § 502(g) the Court reduced her requested hours by 30%, she asks the Court for purposes of a common fee award to consider all the hours requested (the time the attorneys and paralegals actually spent on this case). She also submits a request for additional hours that the attorneys (778.35 hours) and paralegals (41 hours) have spent since April 23, 2008 through January 2, 2011. # 179 at 36.

She then urges that the 29.8% benchmark should be upwardly adjusted for the following Johnson factors: (1) the time and labor required; (2) the complexity and difficulty of interrelated issues; (3) the unique skills required to litigate an ERISA class action; (4) the preclusion of other employment; (5) the firm's customary 33 and 1/3% contingent fee; (6) the risk of nonpayment in common fund cases; (7) the experience, reputation, and ability of the attorneys; (8) the undesirability of the case; and (9) awards made in similar cases, with specific examples listed. Humphrey therefore seeks an upward adjustment to 33 and 1/3%, the percentage fee which courts have typically awarded in other class actions for pension benefits under a defined benefit plan.

For the lodestar cross-check, Plaintiff states that she cannot obtain supporting affidavits from Houston ERISA attorneys of comparable skill, experience and reputation in the Houston community because no hourly rates exist since class actions are nearly always prosecuted on a contingent fee basis. Instead she cites to cases in which hourly rates were awarded in the past two years to attorneys who handled employment, benefits, or complex cases in the Southern District of Texas and presents a chart of their awards. She concludes that a reasonable hourly rate for her law firm's ⁸ partners would be $425, for associates, $225, and for paralegals, $125, a slight increase over what the Court found in its award over two years ago that recognizes “current” rates.

As for the number of hours, given the Court's reductions in the previous fee award, for the period from April 23, 2008 to January 2, 2011 Plaintiff maintains that for purposes of the cross–check the firm has written off hours ⁹ for unproductive, excessive, or redundant services.¹⁰ (Handwritten “WO” (writeoff) notations on Time records for 4/23/09–2/02/11 (PX102)). Specifically they wrote off sixteen hours for Cantarella, 19.30 hours for Schram, 39.60 hours for Geller, and 4.50 hours for Howes. Id.

After writeoffs, summarizes Humphrey, the total reasonable hours for both the pre–4/23/08 period and the post–4/23/08 period are as follows (# 179 at 41):

+--------------------------------------------+
                ¦  ¦Cantarella¦2,130.34 hours¦               ¦
                +--+----------+--------------+---------------¦
                ¦  ¦Schram    ¦266.81 hours  ¦               ¦
                +--+----------+--------------+---------------¦
                ¦  ¦Geller    ¦323.30 hours  ¦               ¦
                +--+----------+--------------+---------------¦
                ¦  ¦McLeod    ¦54.17 hours   ¦               ¦
                +--+----------+--------------+---------------¦
                ¦  ¦Howes     ¦69.23 hours   ¦               ¦
                +--+----------+--------------+---------------¦
                ¦  ¦Rayment   ¦28.81

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