Savani v. URS Prof'l Solutions LLC, Civil Action No. 1:06–cv–02805–JMC.

• Decision Date: 04 August 2015
• Docket Number: Civil Action No. 1:06–cv–02805–JMC.
• Citation: 121 F.Supp.3d 564
• Court: U.S. District Court — District of South Carolina
• Parties: Noorali "Sam" SAVANI and Robert P. Taylor, Jr. individually and on behalf of others similarly situated, Plaintiffs, v. URS PROFESSIONAL SOLUTIONS LLC formerly Washington Safety Management Solutions, LLC, formerly Westinghouse Safety Management Solutions, LLC, and Washington Safety Management Solutions, LLC's Pension Plan, now URS Professional Solutions Pension Plan formerly WSMS Pension Plan, Washington Group International, Inc. now known as URS Energy & Construction, Inc. and Roger Allen, Julie Tschida Brown, Dave Hollan, and Deloyd Cazier as Trustees and Members of the Benefits now Administrative Committee of URS Professional Solutions Pension Plan, Defendants.

121 F.Supp.3d 564

Noorali "Sam" SAVANI and Robert P. Taylor, Jr. individually and on behalf of others similarly situated, Plaintiffs,

v.URS PROFESSIONAL SOLUTIONS LLC formerly Washington Safety Management Solutions, LLC, formerly Westinghouse Safety Management Solutions, LLC, and Washington Safety Management Solutions, LLC's Pension Plan, now URS Professional Solutions Pension Plan formerly WSMS Pension Plan, Washington Group International, Inc. now known as URS Energy & Construction, Inc. and Roger Allen, Julie Tschida Brown, Dave Hollan, and Deloyd Cazier as Trustees and Members of the Benefits now Administrative Committee of URS Professional Solutions Pension Plan, Defendants.

Civil Action No. 1:06–cv–02805–JMC.

United States District Court, D. South Carolina, Aiken Division.

Signed Aug. 4, 2015.

Cheryl F. Perkins, Whetstone Perkins and Fulda, Columbia, SC, Stanley G. Jackson, Jackson Law Offices, Tom G. Woodruff, Woodruff Law Offices, Aiken, SC, for Plaintiffs.

Gray Thomas Culbreath, Janice Holmes, Gallivan White and Boyd, Columbia, SC, H. Douglas Hinson, Alston and Bird, Atlanta, GA, for Defendants.

ORDER AWARDING ATTORNEY'S FEES, APPROVING COSTS AND NAMED PLAINTIFF INCENTIVE AWARD

J. MICHELLE CHILDS, District Judge.

This matter comes before the court on Plaintiffs' Unopposed Motion for Approval of Supplemental Class Counsel Attorney's Fees, Costs and Incentive Awards for Named Plaintiff filed on May 21, 2015. (ECF No. 332.) The court conducted a hearing on these issues, under Fed.R.Civ.P. 23(c), on July 28, 2015. (ECF No. 339.) The court has reviewed the materials submitted by the parties and has heard arguments and evidence presented at the hearing. For the reasons cited herein and the evidence presented, the court finds and concludes as follows:

1. As a preliminary matter, this court has jurisdiction over the subject matter of this action, the parties, and the Class. Previously, Class Counsel moved, and this Honorable Court granted an Order, awarding attorney's fees to be paid from the litigation proceeds recovered for the Class and an incentive award for the Class Representative, Noorali "Sam" Savani, who represented the Primary Class. As noted in the Order granting the prior award, the Partial Fee Settlement Agreement and Release did not cover claims for fees or costs incurred for the pending appeal of the Judgment as to the Subclass or proceedings post-appeal. (ECF No. 323.) The award for attorney's fees for representing the Primary Class through a final Judgment was 39.57% of the settlement cash that had been deposited with Class Counsel. (ECF No. 323 ¶ 27 at 9.) Now the appeal for the Subclass is final, the case has been remanded to this court, and past due payments have been deposited for past due benefits with Class Counsel; so this application for additional supplemental attorney's fees, costs, and an incentive fee for Robert P. Taylor, Jr., the named representative for the Subclass, is ripe for decision.

2. Notice of the requested award of attorney's fees, cost reimbursement, and Named Plaintiff incentive award was directed to Subclass members in a reasonable manner through first-class mailing to their most recent known addresses on May 29, 2015 and complies with Fed.R.Civ.P. 23(h)(1).

3. All Subclass members who still have an interest in the motion as vested members¹ in the pension plan at issue were given the opportunity to object to fees, costs and/or incentive awards in compliance with Fed.R.Civ.P. 23(h)(2). No Subclass member appeared or objected.

I. ATTORNEY'S FEES

4. An award of reasonable attorney's fees is within the discretion of this court. Alexander S. v. Boyd, 113 F.3d 1373, 1390 (4th Cir.1997) ; Colonial Williamsburg Found. v. Kittinger Co., 38 F.3d 133, 138 (4th Cir.1994) ; Plyler v. Evatt, 902 F.2d 273, 277–78 (4th Cir.1990) (noting "review of the district court's award is sharply circumscribed; we have recognized that because a district court has close and intimate knowledge of the efforts expended and the value of the services rendered, [the fee award] must not be overturned unless it is clearly wrong.") (Internal quotation marks omitted).

5. Class Counsel has resolved with Defendants accrued claims for attorney's fees under fee-shifting status of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(g). Defendants have paid to Class Counsel the sum of $60,000.00 as memorialized in a Partial Fee Settlement Agreement and Release which was approved by this court (ECF No. 329). Additionally, Defendants have deposited into the escrow account of Plaintiffs' Class counsel as past-due benefits with interest for those members of the Subclass due retroactive benefits the sum of $956,574.00² . It is from this latter fund that Plaintiffs' Class counsel seeks 39.57% as a percentage of the fund as attorney's fees, the payment of costs, and an incentive fee for the Subclass representative.

A. Percentage Of The Fund.

6. For well over a century, the United States Supreme Court has recognized the "common fund" exception to the general rule that a litigant bears his or her own attorney's fees. Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 (1881). The rationale for the common fund principle was explained in Boeing Co. v. Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980), "that a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole."

7. Within this Circuit, the percentage-of-recovery approach is not only permitted, but is the preferred approach to determine attorney's fees. See Goldenberg v. Marriott PLP Corp., 33 F.Supp.2d 434, 438 (D.Md.1998) (noting endorsement of percentage-of-recovery method by several courts in the Fourth Circuit); In re Microstrategy, Inc. Sec. Litig.,

172 F.Supp.2d 778, 786–87 (E.D.Va.2001) ; Strang v. JHM Mortgage Sec. Ltd. P'ship, 890 F.Supp. 499, 503 (E.D.Va.1995) ("the percentage method is more efficient and less burdensome than the traditional lodestar method, and offers a more reasonable measure of compensation for common fund cases"); Jones v. Dominion Res. Servs., 601 F.Supp.2d 756, 760 (S.D.W.Va.2009).

8. The percentage-of-recovery method is appropriate where the recovered funds confer a benefit on members of a class. Boeing Co., 444 U.S. at 479, 100 S.Ct. 745 ; see also Teague v. Bakker, 213 F.Supp.2d 571, 584 (W.D.N.C.2002) ("an award of attorneys' fees from a common fund depends on whether the attorneys' specific services benefitted the fund—whether they tended to create, increase, protect or preserve the fund").

B. Percentage of the Fund Method under ERISA.

9. Courts routinely grant attorney's fees as a percentage-of-recovery where the common fund arose from the settlement of claims pursuant to ERISA, 29 U.S.C. §§ 1101 et seq.Staton v. Boeing Corp., 327 F.3d 938 (9th Cir.2003) ; In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 469 (S.D.N.Y.2004) (noting that "[c]ommon fund awards are appropriate in 401(k) and other ERISA class action litigation to the same extent as in any other type of litigation"); In re Unisys Corp. Retiree Med. Benefits ERISA Litig., 886 F.Supp. 445, 456 (E.D.Pa.1995) (noting "[a]n award of fees from [a common] fund would also further ‘the policy, underlying [ERISA], of providing both prospective plaintiffs and their attorneys an economic incentive to bring meritorious ERISA cases' ") (quoting Bowen v. Southtrust Bank of Ala., 760 F.Supp. 889, 894 (M.D.Ala.1991) ).

10. In ERISA cases litigated to judgment, several courts have concluded that an award of common fund attorney's fees from the judgment is inappropriate due to ERISA's anti-alienation provision, 29 U.S.C. § 1056(d)(1). See, e.g., Kickham Hanley, P.C. v. Kodak Ret. Income Plan, 558 F.3d 204 (2d Cir.2009) ; Martorana v. Bd. of Trs. of Steamfitters Local Union 420 Health, Welfare & Pension Fund, 404 F.3d 797, 804 (3d Cir.2005). Other courts have viewed an award of fees from an ERISA recovery, even after judgment on the merits, as proper. See, e.g., Kifafi v. Hilton Hotels Ret. Plan, 999 F.Supp.2d 88 (D.D.C.2013) (attorney's fee award of 15% of the fund following summary judgment on anti-backloading claim creating a fund worth between $ 103 and $ 152 million).

11. In this particular case, ERISA's anti-alienation provision does not bar Class Counsel's request for common fund attorney's fees. ERISA's preclusion against "attachment" or "alienation" of pension benefits only applies while the funds are in the control of the Plan. First Trust Corp. v. Bryant, 410 F.3d 842, 851 (6th Cir.2005). The provision no longer applies "once the benefits have been released to the properly designated beneficiary." Cent. States, Se. & Sw. Areas Pension Fund v. Howell, 227 F.3d 672, 679 (6th Cir.2000). Thus, prevailing ERISA class counsel are only precluded from "receiving fees from that portion of a common fund comprised of undistributed and/or only potential future benefits." Humphrey v. United Way of the Tex. Gulf Coast, 802 F.Supp.2d 847, 862 (S.D.Tex.2011) ; see also Guidry v. Sheet Metal Workers Nat'l Pension Fund, 39 F.3d 1078, 1082–1083 (10th Cir.1994) (" ‘[B]enefits' are protected by the anti-alienation provision of section 206(d)(1) only so long as they are within the fiduciary responsibility of private plan managers.").

12. Class Counsel herein seeks a common fund recovery of attorney's fees, costs and incentive awards to be paid from the past benefits judgment in favor of the Subclass. (ECF No. 330 and 331.) These funds are no longer within the fiduciary responsibility of Defendant Plan managers, having been tendered to and received by Class Counsel, and deposited and held in trust for the benefit of the Subclass, in full compliance with this court's Second Amended Subclass Money Judgment dated May 14, 2015. (ECF No. 331.) The Second Amended Subclass Money Judgment established ownership of the litigation funds by the...