Schuman v. Aetna Life Ins. Co., 3:15-cv-01006 (SRU)

• Decision Date: 16 October 2017
• Docket Number: No. 3:15-cv-01006 (SRU),3:15-cv-01006 (SRU)
• Court: U.S. District Court — District of Connecticut
• Parties: JEFF SCHUMAN, Plaintiff, v. AETNA LIFE INS. CO., et al., Defendants.

JEFF SCHUMAN, Plaintiff, v. AETNA LIFE INS. CO., et al., Defendants.

No. 3:15-cv-01006 (SRU)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

October 16, 2017

RULING ON SUPPLEMENTAL MOTION FOR ATTORNEYS' FEES

Jeff Schuman previously moved for attorneys' fees and costs under section 502(g)(1) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(g)(1), arguing that he was entitled to fees and costs because he obtained a remand order in his suit against Aetna Life Insurance Co. (as claims administrator), Ahold USA's Master Welfare Benefit Plan, and the Administrative Committee of Ahold USA (as plan administrator). On June 20, 2017, I issued an order granting attorneys' fees but sharply reducing the award to less than one-quarter of Schuman's requested amount. See Schuman v. Aetna Life Ins. Co., 2017 WL 2662191 (D. Conn. June 20, 2017). Schuman now seeks an additional $9,173.75 in "fees for fees" to compensate him "for time spent . . . reviewing defendants' opposition [to the motion for attorneys' fees], reviewing Court orders, research[ing] and drafting the Reply brief, and drafting [his] motion for supplemental fees." See Suppl. Mot. Attorneys' Fees, Doc. No. 91, at 1.

The $38,627.50 I previously awarded "adequately—even generously"—"compensate[d] Schuman for his limited success on the merits." See Schuman, 2017 WL 2662191, at *10. Consistent with my "substantial discretion in fixing the amount of an [ERISA] fee award," see Comm'r, INS v. Jean, 496 U.S. 154, 163 (1990), I decline to award Schuman additional fees for the time spent preparing and litigating his inflated attorneys' fees application.

I. Standard of Review

Section 1132(g)(1) of ERISA 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). The Supreme Court has held that, under the language of the statute, "a fee claimant need not be a 'prevailing party' to be eligible for an attorney's fees award." Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252 (2010). Instead, a claimant need only "show 'some degree of success on the merits' before a court may award attorney's fees under [section] 1132(g)(1)." Id. at 255 (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983)). "[S]ome degree of success on the merits" demands more than "'trivial success on the merits' or a 'purely procedural victor[y].'" Id. (quoting Ruckelshaus, 463 U.S. at 688 n.9). The court must be able to "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. (quoting Ruckelshaus, 463 U.S. at 688 n.9) (other internal quotation marks omitted).

"[W]hether a plaintiff has obtained some degree of success on the merits is the sole factor that a court must consider in exercising its discretion," but the court may also look to the factors set forth in Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869 (2d Cir. 1987). See Donachie v. Liberty Life Assurance Co. of Bos., 745 F.3d 41, 46 (2d Cir. 2014). Under Chambless, in determining whether to award attorneys' fees, the court may consider:

(1) the degree of opposing parties' culpability or bad faith;

(2) [the] ability of opposing parties to satisfy an award of attorneys' fees;

(3) whether an award of attorneys' fees against the opposing parties would deter other persons acting under similar circumstances;(4) whether the parties requesting attorneys' fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and

(5) the relative merits of the parties' positions.

Donachie, 745 F.3d 41, 46 (2d Cir. 2014) (quoting Hardt, 560 U.S. at 249 n.1; citing Chambless, 815 F.2d at 871 (same factors, but with order of fourth and fifth factors reversed)). Because "Congress intended the fee provisions of ERISA to encourage beneficiaries to enforce their statutory rights," those provisions "must be liberally construed to protect the statutory purpose." Slupinski v. First Unum Life Ins. Co., 554 F.3d 38, 47 (2d Cir. 2009) (internal quotation marks omitted). In particular, "granting a prevailing plaintiff's request for fees is appropriate absent 'some particular justification for not doing so.'" Donachie, 745 F.3d at 47 (quoting Birmingham v. SoGen-Swiss Int'l Corp. Ret. Plan, 718 F.2d 515, 523 (2d Cir. 1983)).

II. Background

The background of this case is set forth at length in Schuman v. Aetna Life Insurance Co., 2017 WL 1053853, at *2-*9 (D. Conn. Mar. 20, 2017). After I remanded Schuman's long-term disability claim to the claims administrator, Schuman moved for attorneys' fees and costs in the amount of approximately $167,000, arguing that had obtained "some degree of success on the merits" as required to recover attorneys' fees under ERISA. See Schuman, 2017 WL 2662191, at *3. The defendants opposed Schuman's motion, contending that Schuman "did not achieve any 'degree of success on the merits'" and that attorneys' fees should be denied or "substantially reduced" under the Chambless factors. See id.

On June 20, 2017, I issued a ruling in which I granted Schuman's motion for attorneys' fees because he "achieved 'some success on the merits.'" Id. at *5 (quoting Hardt, 560 U.S. at 256). I conclude, however, that Schuman should "recover attorneys' fees . . . in a smaller amountthan he ha[d] claimed," both because the rates charged by his attorneys were "excessive" and because "[m]any of the hours billed . . . were spent on unsuccessful claims." Id. at *7, *9. I reduced the Schuman's attorneys' hourly rates by 6.25 percent and 20 percent, respectively, and "permit[ted] [the] attorneys to recover fees for only one-quarter of their claimed hours." Id. at *10. I also "exercise[d] my discretion . . . to deny costs because Schuman [was] not a 'prevailing party,'" and "[t]he attorneys' fees award sufficiently compensate[d] Schuman for his limited success on the merits." Id. In total, I awarded Schuman $38,627.50 in attorneys' fees. Id.

On July 3, 2017, Schuman filed a supplemental motion for attorneys' fees in the amount of $9,173.75. See Suppl. Mot. Attorneys' Fees, Doc. No. 91, at 1. Schuman claims that the fees account for "time spent on this case . . . after the April 18, 2017 fee application," including work "reviewing defendants' opposition [to the motion for attorneys' fees], reviewing Court orders, research[ing] and drafting the Reply brief, and drafting this motion for supplemental fees." See id. The defendants filed an opposition to Schuman's motion three weeks, arguing that Schuman "seeks payment for 'failure-on-failure'" and should not be compensated again for his "largely unsuccessful application for fees." Mem. Opp'n Suppl. Mot. Attorneys' Fees, Doc. No. 93, at 1.

III. Discussion

"[A]ttorneys' fees for the preparation of the fee application are compensable," Reed v. A.W. Lawrence & Co., 95 F.3d 1170, 1183 (2d Cir. 1996) (citing Gagne v. Maher, 594 F.2d 336, 344 (2d Cir. 1979), aff'd on other grounds, 448 U.S. 122 (1980)), and the Second Circuit has indicated that, "unless there are reasons to the contrary, motion costs should be granted whenever underlying costs are allowed." Valley Disposal v. Cent. Vt. Solid Waste Mgmt. Dist., 71 F.3d 1053, 1060 (2d Cir. 1995). Nevertheless, "[t]he district court has broad authority to depart from th[at] basic assumption." Valley Disposal, 71 F.3d at 1060. Should "the fee claims [be]exorbitant or the time devoted to presenting them . . . unnecessarily high, the judge may refuse further compensation or grant it sparingly." Gagne v. Maher, 594 F.2d 336, 344 (2d Cir. 1979), aff'd on other grounds, 448 U.S. 122, (1980); see Jean, 496 U.S. at 163 (allowing "[e]xorbitant, unfounded, or procedurally defective fee applications" to be "discount[ed]"). Moreover, "fees for fee litigation should be excluded to the extent that the applicant ultimately fails to prevail in such litigation." Jean, 496 U.S. at 163 n.10. For example, "if [a party]'s challenge to a requested rate . . . resulted in the court's recalculating and reducing the award . . . from the requested amount, then the applicant should not receive fees for the time spent defending the higher rate." Id.

I already determined that Schuman "achieved 'some degree of success on the merits,'" Schuman, 2017 WL 2662191, at *7 (quoting Toussaint v. JJ Weiser, Inc., 648 F.3d 108, 110 (2d Cir. 2011)), which means that he has crossed the "one-time threshold for fee eligibility." See Jean, 496 U.S. at 160. But even though Schuman has demonstrated his "eligibility" for a fee award, "I am not required to award Schuman fees merely because he is 'eligible.'" See Schuman, 2017 WL 2662191, at *5 (noting that ERISA provides that "the court in its discretion may allow a reasonable attorney's fee and costs of action" (quoting 29 U.S.C. § 1132(g)(1)) (emphasis in Schuman)). Here, because Schuman's "fee claims [were] exorbitant" and "the time devoted to presenting them [was] unnecessarily high," I "exercise [my] discretion . . . [to] refuse further compensation" for Schuman's reply memorandum. See Gagne, 594 F.2d at 344.

In his present motion, Schuman seeks an additional $9,000 in attorneys' fees for 26.05 hours spent "reviewing defendants' memorandum, reviewing the Court's rulings and in researching, and drafting, the Reply." See Mem. Supp. Suppl. Mot. Attorneys' Fees, Doc. No. 91-1, at 1. That work apparently consisted of reading the defendants' 14-page opposition brief and then drafting Schuman's 10-page reply. See Mem. Opp'n Mot. Attorneys' Fees, Doc. No.88; Reply Mem. Supp. Mot. Attorneys' Fees, Doc. No. 89. As an initial matter, 26 hours to read and prepare a short reply to the defendants' opposition strikes me as "unnecessarily...