Jarosz v. Am. Axle & Mfg., Inc.
| Decision Date | 11 December 2019 |
| Docket Number | 12-CV-39S |
| Parties | RICHARD JAROSZ, CAROLE ARCHAMBEAULT, EUGENIA BELLERE, ROBERT BRANDON, JOHN CZECH, GERALD DIXON, ROBIN GLOVER, PATRICK HIGGINS, WALLACE JAROSZEWSKI, TODD KENDZIERSKI, DONNA LICHTENTHAL, MICHAEL LoGRASSO, WILLIAM McDONELL, ROBERT OSBORNE, ANNE OSIKA, KATHY PERKOVICH, TAMMY SANTANA, GAIL SCHALBERG, WILLIAM SEVERINO, JAMES SHORT, MICHAEL STOWELL, KENNETH ZIOLKOWSKI, and SUSAN WISE, Plaintiffs, v. AMERICAN AXLE & MANUFACTURING, INC., HOURLY-RATE ASSOCIATES PENSION PLAN, and AMERICAN AXLE & MANUFACTURING, INC., Defendants. |
| Court | U.S. District Court — Western District of New York |
In this action, the plaintiffs, each of whom is a qualified participant in the Defendant American Axle & Manufacturing, Inc. Hourly-Rate Associates Pension Plan ("the Plan"), alleged that Defendants violated the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., by reducing their pension payments due under the Plan by the amount of certain workers' compensation payments that they received. Nine months ago, this Court resolved the parties' cross motions for summary judgment anddetermined that Plaintiffs are owed the full benefits to which they are entitled under the Plan (retroactive and prospective) without reduction for workers' compensation payments received, together with prejudgment interest. See Jarosz v. Am. Axle & Manuf., Inc., 372 F. Supp. 3d 163, 182 (W.D.N.Y. 2019). Now before this Court is Plaintiffs' Motion for Attorneys' Fees and Costs (Docket No. 79), which for the reasons stated below, is granted.
On March 12, 2019, this Court granted the parties' cross-motions for summary judgment in part and denied them in part. See Jarosz, 372 F. Supp. 3d at 168. It granted Plaintiffs summary judgment on their ERISA claim, but otherwise denied their motion. See id. at 178-182. It granted Defendants summary judgment on Plaintiffs' promissory-estoppel, standard-of-review, and equitable-relief claims, but denied their motion as to Plaintiffs' ERISA claim. Id. at 182-186. Subsequently, this Court directed that prejudgment interest be paid at the variable federal prime interest rate and clarified that the award is against the Plan, not Defendant American Axle Manufacturing, Inc. (Docket No. 87.)
In its initial decision, this Court directed Plaintiffs to file any motion for attorneys' fees and costs within 30 days, which they did on April 11, 2019. See Jarosz, 372 F. Supp. 3d at 186; Docket No. 79. After full briefing, this Court took the motion under advisement on May 1, 2019.2 (Docket Nos. 79, 81-86.) For the following reasons, thisCourt finds that Plaintiffs are entitled to reasonable attorneys' fees and costs in the amount of $137,469.12 and $5,241.03, respectively.
ERISA is a fee-shifting statute: a court may award reasonable attorneys' fees and costs for either party in its discretion. See 29 U.S.C. § 1132 (g)(1). Given that Congress intended fee-shifting to encourage participants and beneficiaries to enforce their statutory rights, this provision is liberally construed. See Donachie v. Liberty Life Assur. Co. of Boston, 745 F.3d 41, 45-46 (2d Cir. 2014) (internal quotations omitted); Locher v. Unum Life Ins. Co. of Am., 389 F.3d 288, 298 (2d Cir. 2004). Awarding a prevailing party attorneys' fees and costs is therefore appropriate unless there is good reason not to. See Donachie, 745 F.3d at 47 (citing Birmingham v. SoGen-Swiss Int'l Corp. Ret. Plan, 718 F.2d 515, 523 (2d Cir. 1983)).
The United States Supreme Court has determined that a party must achieve "some degree of success on the merits" to obtain an award under § 1132 (g)(1). Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 244-45, 255, 130 S. Ct. 2149, 176 L. Ed. 2d 998 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694, 103 S. Ct. 3274, 77 L. Ed. 2d 938 (1983)). The party need not be a traditional "prevailing party," but it must achieve more than trivial success on the merits or a purely procedural victory. Id. at 252-255 (quoting Ruckelshaus, 463 U.S. at 688 n.9). The standard is satisfied "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 was'substantial' or occurred on a 'central issue.'" Id. at 255 (quoting Ruckelshaus, 463 U.S. at 688 n.9).
"Some degree of success on the merits" is all that is necessary to establish eligibility for an award under the statute, see Hardt, 560 U.S. at 254-55, but several factors continue to guide a court's discretion whether to make such an award, see id. at n.8. See also Donachie, 745 F.3d at 46 . In this circuit, those factors are known as the "Chambless factors," which are as follows:
Id. (). These factors must be considered in full if a court looks beyond "success on the merits." See Donachie, 745 F.3d at 47 ().
Defendants do not dispute—and there is no question—that Plaintiffs achieved success on the merits as they won their ERISA claim and recovered upwards of $1 million in withheld benefits, thus vindicating their statutory rights. (See Affidavit of Robert L. Boreanaz, Esq. ("Boreanaz Aff."), Docket No. 79-1, ¶ 9.) They are therefore eligible for an award of attorneys' fees and costs under 29 U.S.C. § 1132 (g)(1).
Plaintiffs argue that the Chambless factors weigh decidedly in their favor. They first note that Defendants are sufficiently culpable because they intentionally failed to comply with ERISA's procedural regulations. See Jarosz, 372 F. Supp. 3d at 177 (). Second, they contend that with assets exceeding $350 million, see Boreanaz Aff., ¶ 25, the Plan is well positioned to satisfy any fee award. Third, they maintain that a fee award is required to deter other plan administrators from improperly denying benefits and forcing participants and beneficiaries to endure protracted and costly litigation. Fourth, Plaintiffs argue that their success conferred a common benefit on the plaintiff participants in excess of $1 million. And finally, Plaintiffs reiterate that they prevailed on the merits, winning their ERISA claimand recovering wrongfully withheld benefits.
In contrast, Defendants argue that the Chambless factors do not support a full award of attorneys' fees and costs. First, they maintain that Plan administrators were not as culpable as Plaintiffs claim, but rather, engaged in a fair and open-minded evaluation of Plaintiffs' claims under the Plan, albeit reaching a different conclusion. Second, while not disclaiming the financial ability to satisfy an award, Defendants note that Plaintiffs' representation of the Plan's assets is unsubstantiated by admissible evidence and, in any event, that the Plan's assets are held to benefit all Plan participants, not just the few Plaintiffs. Third, Defendants claim that rather than having a deterrent effect, an attorneys' fee award would chill ERISA plan administrators' ability to interpret their own plans in good faith without fear of punishment. Fourth, Defendants contend that Plaintiffs did not confer a common benefit on all plan participants and beneficiaries, but rather, only for themselves, representing just .003% of the Plan participants. (See Declaration of Catherine Grantier Cooley ("Cooley Decl."), Docket No. 83, ¶ 20.) Finally, Defendants note that although Plaintiffs established their ERISA claim, Defendants succeeded in securing summary judgment on three of Plaintiffs' claims and the dismissal of three deceased plaintiffs.
Having considered the parties' positions and the Chambless factors, this Court comfortably finds that an award of attorneys' fees and costs is appropriate in this case. To begin, Defendants are sufficiently culpable. A defendant is culpable when it "violate[s] ERISA, thereby depriving plaintiffs of rights under a pension plan and violating a Congressional mandate." Salovaara v. Eckert, 222 F.3d 19, 28 (2d Cir. 2000)."Culpability does not require malice, and instead considers conduct that is 'blameable' or 'at fault,' such as the denial of a meritorious benefits application." Div. 1181, Amalgamated Transit Union v. N.Y.C. Dep't of Educ., No. 13-CV-9112 (PKC), 2018 WL 4757938, at *3 (S.D.N.Y. Oct. 2, 2018). Defendants violated ERISA here by failing to pay more than $1 million in benefits due under the plain language of the Plan and by...
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