King v. Jcs Enterprises, Inc.

• Decision Date: 13 July 2004
• Docket Number: No. CIV.A. 94-4604-WGY.,CIV.A. 94-4604-WGY.
• Citation: 325 F.Supp.2d 162
• Parties: Theodore KING and Aniello Madonna, as Trustees of Local 282 International Brotherhood of Teamsters Welfare, Pension, Annuity and Job Training Trust Funds, Plaintiffs, v. JCS ENTERPRISES, INC. and JCS Construction Co., Defendants.
• Court: U.S. District Court — Eastern District of New York

Page 162

325 F.Supp.2d 162

Theodore KING and Aniello Madonna, as Trustees of Local 282 International Brotherhood of Teamsters Welfare, Pension, Annuity and Job Training Trust Funds, Plaintiffs, v. JCS ENTERPRISES, INC. and JCS Construction Co., Defendants.

No. CIV.A. 94-4604-WGY.

United States District Court, E.D. New York.

July 13, 2004.

COPYRIGHT MATERIAL OMITTED

Erinn Weeks Waldner, Michael Bauman, Friedman & Wolf, Bruce S. Levine, Cohen, Weiss and Simon LLP, New York, NY, for Plaintiffs.

Anthony V. Barbiero, Anthony V. Barbiero, P.C., East Islip, NY, for Defendants and Counter Claimant.

Avram H. Schreiber, New York, NY, for Counter Defendants.

MEMORANDUM AND ORDER

YOUNG, Chief Judge.¹

I. INTRODUCTION

This application for attorneys' fees follows a trial between Plaintiffs Theodore King and Aniello Madonna (collectively "Trustees"), as Trustees of Local 282 International Brotherhood of Teamsters ("Local 282") employee benefit funds against JCS Enterprises, Inc. and JCS Construction Company (collectively "JCS"). Filed under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132, the Trustees sought to collect unpaid contributions to Local 282's employee benefit funds. After a bench trial, this Court held in favor of the Trustees and upon reviewing further evidence, ordered that JCS² remit unpaid contributions in the amount of $108,108 plus interest, additional interest, and attorneys' fees and costs as provided by 29 U.S.C. § 1132(g)(2). King v. JCS Enterprises, 288 F.Supp.2d 287, 291 (E.D.N.Y.2003). The issue before the Court today is what amount to award the Trustees in attorneys' fees and costs under Section 1132(g)(2).

The Trustees request $363,285.50 in attorneys' fees and $127,921.83 in costs, totaling $491,207.33. Calculating the award based on the lodestar method and following Second Circuit precedent in awarding costs, this Court awards Trustees $297,810.63 in attorneys' fees and $31,211.38 in costs.

II. BACKGROUND

For the period between July 1, 1993, and June 30, 1996, JCS was a party to a collective bargaining agreement ("CBA") with Local 282. See 5/16/03 Trial Tr. at 556; Trial Ex. 2, at 1 (copy of 1993-1996 CBA). In part, this CBA required JCS to make contributions to four employee funds: Welfare, Pension, Annuity and Job Training (collectively "Funds"). CBA § 13. The amount of the contributions was set in the CBA as a specific contribution per fund per hour worked by JCS employees. Id. Starting in 1994, the Trustees claimed that JCS skipped payments and under-reported hours to reduce the amount of contributions due. In all, the Trustees filed four separate actions to collect contributions to the Funds from JCS. Those actions involved:

1) a claim for unpaid contributions for March-June 1994 in the amount of $18,288.64, plus liquidated damages and penalties, King v. JCS Enterprises Inc., No. 94-CV-4604 (E.D.N.Y. filed Sept. 30, 1994);

2) a request for an order to compel JCS to post a $20,000 surety bond to guarantee payment to the Funds, as called for in the CBA, Mastrandrea v. Darcon Construction, Inc., No. 95-CV-3663 (E.D.N.Y. filed Sept. 8, 1995);

3) a claim for unpaid contributions for July-August 1995 in the amount of $58,702.52, plus liquidated damaged and penalties, King v. JCS Enterprises, Inc., No. 95-CV-4370 (E.D.N.Y. filed Oct. 25, 1995); and

4) a claim for contributions owed as a result of under-reporting employees hours and general unpaid contributions for February 1994-1996 in the amount of $396,888.88, LaBarbera v. J.C.S. Enterprises Inc., No. 96-2089 (E.D.N.Y. filed Apr. 29, 1996).

These four actions were consolidated for trial before Judge Platt on September 4, 1996, in the lead case of King v. JCS Enterprises Inc., No. 94-4604. Order of 9/04/96 [Doc. No. 42]. At the suggestion of the court, the parties attempted to resolve the matter through an independent audit of JCS' books. See Letter from Levine to Judge Platt of 1/7/00 [Doc. No. 117] at 1. JCS disagreed with the auditor's conclusions, however, and pursued the issue in court. Letter from Barbiero to Judge Platt of 1/10/00 [Doc. No. 119] at 1-2.

The matter came before this Court in April 2002. After a bench trial in 2003, the Court concluded that JCS and its alter egos owed contributions to the Funds. 5/16/03 Trial Tr. at 556-58. After receiving further evidence, the Court ordered remittance of the unpaid contributions in the amount of $108,108.00, plus interest, additional interest, and the Trustees' attorneys' fees and costs, as required under 29 U.S.C. § 1132(g)(2). King, 288 F.Supp.2d at 291.

III. DISCUSSION

Under the "American Rule," prevailing parties will not be awarded attorney's fees unless expressly authorized by Congress. E.g., Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). Congress has expressly provided that attorney's fees and costs shall be awarded to plan trustees who prevail on ERISA claims under 29 U.S.C. § 1145. 29 U.S.C. § 1132(g)(2) ("the court shall award the plan ... reasonable attorney's fees and costs of the action"). As matter of law, such an award under Section 1132(g)(2) is mandatory. Id.; Iron Workers Dist. Council of Western New York & Vicinity Welfare and Pension Funds v. Hudson Steel Fabricators & Erectors, Inc., 68 F.3d 1502, 1506 (2d Cir.1995); King, 288 F.Supp.2d at 288.

(a) Attorney's Fees

The amount of attorney's fees awarded under ERISA must be "reasonable." 29 U.S.C. § 1132(g)(2). In determining what is a reasonable fee, the Second Circuit "generally follow[s] the framework set forth by the Supreme Court" in Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Green v. Torres, 361 F.3d 96, 98 (2d Cir.2004); Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir.1999). The first step is to calculate the "lodestar"³ amount — that is, "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley, 461 U.S. at 433, 103 S.Ct. 1933.

1. Hours Reasonably Expended

The lodestar calculation should include only hours that were reasonably expended on the litigation. Hensley, 461 U.S. at 434, 103 S.Ct. 1933; Orchano v. Advanced Recovery Inc., 107 F.3d 94, 98 (2d Cir.1997). The prevailing party has the burden of producing contemporaneous time records that "specify, for each attorney, the date, the hours expended, and the nature of the work done," so the court can audit the hours and determine whether they were reasonably expended. New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir.1983); see also Hensley, 461 U.S. at 433, 103 S.Ct. 1933. In addition to hours worked by attorneys, the hours reasonably expended by law clerks will be included in the calculation. New Leadership Comm. v. Davidson, 23 F.Supp.2d 301, 305 (E.D.N.Y.1998) (Gershon, J.) (holding that law student fees recoverable); cf. Missouri v. Jenkins, 491 U.S. 274, 285, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989) (holding that paralegals' time should be included in the lodestar calculation); United States Football League v. Nat'l Football League, 887 F.2d 408, 416 (2d Cir.1989) (affirming award of fees that included paralegals' time in lodestar calculation).

The Trustees have submitted detailed billing records for the 1786 .75 hours they attribute to this case. See generally Bauman Decl. of 10/17/03 ("Bauman Decl.").⁴ Although JCS contends that "many of the records are inadequate to support a fee award," Defs.' Mem. Opp'n to Pls.' App. Attys' Fees at 28, the Court disagrees. The records detail the time expended on this case, identifying who did the work, what was done, and when. See generally Bauman Decl. These records sufficiently describe the work performed by the Trustees' attorneys and rule out any reduction to the requested hours on the basis of inadequate documentation.

From these records, the Court must determine what hours were reasonably expended and will therefore be included in the lodestar calculation. Excessive and unnecessary hours as well as time spent on unsuccessful claims should be excluded from the lodestar calculation. See Hensley, 461 U.S. at 434, 436-37, 103 S.Ct. 1933; Orchano, 107 F.3d at 98.⁵ If an unsuccessful claim is distinct and severable, the time attributable to that claim simply ought be omitted from the amount of hours reasonably expended on the suit. See Hensley, 461 U.S. at 434-35, 103 S.Ct. 1933. Where it is impractical to separate out the hours, for example because the successful and unsuccessful claims are interwoven by a common core of facts so that much of the time was spent in developing the case as a whole, the hours are included in toto in the lodestar calculation. See id. at 435, 103 S.Ct. 1933. In such a case, the court may exercise its discretion to reduce the total lodestar amount to account for the lack of complete success. See id. at 436-37, 103 S.Ct. 1933; see also United States Football League, 887 F.2d at 414.

To support their request for 1786.75 hours, the Trustees begin by noting that "it is undisputed that the case has had a long, contentious history, and has been defended ferociously." Pls.' Mem. Supp. of Mot. Attys' Fees at 5. The Trustees argue that they should be awarded their full fee request because they achieved nearly complete success. Pls.' Reply Mem. Supp. of Mot. Attys' Fees at 10. Acknowledging that they did not prevail on every theory advanced, the Trustees suggest that any "'failure' on certain claims[ ] should have no bearing on the attorney's fee award" because they were not primary theories, and further because they shared facts common to other primary — and successful — theories. See id. at 13-14.

JCS disputes the Trustees' characterization of the case as successful, claiming rather that "[t]he [Trustees] [d]id [n]ot [p]revail on the [p]rincipal [i]ssues in this [c]ase." Defs.' Mem. Opp'n to Pls.' App. Attys' Fees at 18. Specifically, JCS points out that the Trustees...