Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-02304/USCOURTS-casd-3_06-cv-02304-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DENNIS GORDON,

Plaintiff,

CASE NO. 06cv2304 IEG (WMc)

ORDER DENYING MOTION FOR

ATTORNEYS’ FEES

(Doc. No. 86.)

vs.

PRUDENTIAL FINANCIAL, INC.; JOHN

GREENE; and MATTHEW VOELKER,

Defendants.

Presently before the Court is a motion for attorneys’ fees brought by defendants Prudential

Financial, Inc., John Greene, and Matthew Voelker. Plaintiff Dennis Gordon opposes the motion. For

the following reasons, the Court denies the motion. 

BACKGROUND

The parties are familiar with the facts and procedural history of this case and they need not

be repeated at length herein. Plaintiff Dennis Gordon brought this action alleging age

discrimination by his former employer (Prudential Financial, Inc.) and his former supervisors

(John Greene and Matthew Voelker). On July 24, 2008, the Court granted summary judgment in

favor of defendants and closed the case. (Doc. No. 84.) The Court denied plaintiff’s motion for

leave to amend his complaint to delete the allegations that defendants discriminated against him in

order to prevent full vesting of plaintiff’s retirement benefits. Plaintiff did not present any

evidence on the retirement benefit claims, and the Court granted summary judgment in favor of

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defendants on those claims. (7/24/2008 Order at 8.) The Court also entered summary judgment

on plaintiff’s claims for age discrimination. Although plaintiff believed he was mistreated in an

effort to force him to retire, defendants’ actions did not create such intolerable working conditions

that a reasonable employee would have felt compelled to resign. Accordingly, the Court granted

summary judgment as to plaintiff’s claims for constructive discharge, breach of contract,

constructive discharge in violation of public policy, and breach of the duty of good faith. (Id. at

11.) The Court also found defendants’ actions were not sufficiently egregious to constitute

harassment or retaliation in violation of California law. (Id. at 12.) Finally, the Court granted

summary judgment on plaintiff’s claims for retaliation and discrimination by the individual

defendants, Greene and Voelker. (Id. at 13.) 

DISCUSSION

Defendants’ Motion for Attorneys’ Fees

Defendants request $87,698 in fees, a fraction of the more than $600,000 fees incurred in

defending this action. Defendants base their fee request on: (1) a fee-shifting provision in the

Employment Retirement Income Security Act (“ERISA”); (2) a fee-shifting provision in

California’s Fair Employment and Housing Act (“FEHA”); and (3) fees incurred in bringing the

present motion. 

A. Attorneys’ Fees Under ERISA

Defendants urge the Court to award $17,174 in fees attributable to the retirement benefits

aspects of the plaintiff’s claims. ERISA contains a fee-shifting provision, 29 U.S.C. § 1132(g)(1),

which provides “[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.” Plaintiff pleaded only state law claims in his complaint, but the Court found his

retirement benefit claims were preempted by ERISA. Defendants seek the fees incurred relating to

the retirement benefit claims. Plaintiff argues he did not bring any claims under ERISA and thus

Section 1132 does not apply. 

In McDorman v. Sierra Auto Center, 770 F. Supp. 551 (D. Nev. 1991), another district

court faced this exact issue. Plaintiff initially brought state law claims, which the court dismissed

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as preempted by ERISA. The court found defendants were not entitled to fees under Section 1132

because plaintiff never brought claims under ERISA. Id. at 552. The court explained:

Considering the text of § 1132, the words “by a participant, beneficiary, or

fiduciary,” imply that a case falls under ERISA when the plaintiff affirmatively

brings a suit under ERISA. In this case, plaintiff sued under state law only. 

Plaintiff sought damages for allegedly tortious conduct, not under the relief

provisions of ERISA. Further, the tortious conduct plaintiff alleges defendants

engaged in did not necessarily arise because of the plan. 

Id. at 552. The McDorman court distinguished another district court decision in Vance v. Aetna

Life Insurance, 714 F. Supp. 203 (E.D. Va. 1989). In Vance, defendants removed plaintiff’s

ostensibly state law claims based on ERISA preemption. Plaintiff then amended his complaint to

assert claims under ERISA. Because the Vance plaintiff at some point brought claims under

ERISA, an attorneys’ fees award under Section 1132 was appropriate. Similarly, in Transitional

Learning Community v. Metropolitan Life Insurance Co., 913 F. Supp. 504 (S.D. Tex. 1996),

plaintiff, an ERISA plan provider, initially characterized its claims as arising under state law. The

court, however, recharacterized plaintiff’s claims as arising under ERISA, and plaintiff prevailed. 

Plaintiff therefore properly received fees under Section 1132. 

The facts of this case are most similar to the McDorman decision. Fees may be appropriate

under Section 1132 even if a plaintiff initially pleads only claims under state law, as evidenced by

the Vance and Transitional decisions. But if a plaintiff never “brings” claims under ERISA, either

initially or after his claims are recharacterized as ERISA claims, then Section 1132 does not apply. 

In this case, apart from initially pleading state law claims regarding retirement benefits, plaintiff

never pursued relief of any kind under ERISA. Indeed, he abandoned his retirement benefits

claims because they were not supported by the evidence. The Court therefore follows the logic of

the McDorman decision and finds defendants are not entitled to fees under ERISA. 

Moreover, even if Section 1132 applied, the Court would exercise its discretion not to

award the requested fees. The Ninth Circuit set forth five factors governing a district court’s

discretionary decision to award fees under ERISA in Hummell v. S.E. Rykoff & Co., 634 F.2d 446

(9th Cir. 1980). The Hummell factors are:

(1) the degree of the opposing parties’ culpability or bad faith; (2) the ability of the

opposing parties to satisfy an award of fees; (3) whether an award of fees against the

opposing parties would deter others from acting under similar circumstances; (4) whether

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See Defendants’ Motion Ex. B.

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the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA

plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits

of the parties’ positions.

Id. at 453; see also Credit Managers Ass’n of So. Cal. v. Kennesaw Life and Acc. Ins. Co., 25 F.3d

743 , 748 (9th Cir. 1994) (setting forth the same factors). None of the five Hummell factors favor

a fee award in this case. 

First, plaintiff did not act culpably or in bad faith. Although plaintiff initially alleged

defendants acted in order to deprive him of retirement benefits, plaintiff did not present any

evidence at summary judgment that this was defendants’ intent. Plaintiff did, however, present

evidence that defendants acted out of age-based animus. Plaintiff sought leave to amend the

complaint to delete the unsupported allegations. These actions do not indicate bad faith. 

Second, plaintiff, an individual with approximately $150,000 annual income,1

 may be able

to satisfy a small fee award but is not in an economic position to easily pay any award. The Ninth

Circuit Court of Appeals has “frequently expressed [its] disfavor of awards of attorney’s fees

against individual ERISA plaintiffs who seek pension benefits to which they believe they are

entitled.” Corder v. Johnson, 37 F.3d 550, 556 (9th Cir. 1994). Because plaintiff is an individual,

this factor does not favor defendants. 

The third and fourth factors are neutral. Nothing about this case suggests a fee award is

necessary in order to deter future similar conduct. Moreover, plaintiff did not represent a class or

seek relief which would affect other plan beneficiaries. 

Finally, the Court considers the relative merits of the parties’ positions. As discussed

above, plaintiff changed his theory of defendants’ motivation from his initial allegations regarding

retirement benefits to his aged-based position at summary judgment. The evidence obtained

through discovery supported the age-based discrimination theory. Although plaintiff conceded the

retirement benefits argument and defendants therefore prevailed on that point, plaintiff behaved

reasonably and this factor does not favor defendants. 

In summary, the Hummell factors do not favor an award of attorneys’ fees in this case. 

Accordingly, even if ERISA’s fee-shifting provision applied, the Court would exercise its

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discretion and decline to award defendants any fees under Section 1132. 

B. Attorneys’ Fees Under FEHA

Defendants also request $60,000 through the attorneys’ fee provision in FEHA. California

Government Code Section 12965(b) provides “the court, in its discretion, may award to the

prevailing party reasonable attorney’s fees and costs.” The California courts have held fees may

only be awarded to a prevailing defendant under this section where the action is “unreasonable,

frivolous, meritless or vexatious.” See Cummings v. Benco Bldg. Svcs., 11 Cal. App. 4th 1383

(Cal. Ct. App. 1992) (citing Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978)).

Defendants limit their FEHA fee request to plaintiff’s claims of discrimination and

retaliation against Greene and Voelker, which they argue were brought without legal foundation. 

Defendants are correct that claims of discrimination and retaliation may not be brought against

individuals under FEHA. Reno v. Baird, 18 Cal. 4th 640, 645-46 (1998); Jones v. Lodge at Torrey

Pines P’ship, 42 Cal. 4th 1158, 1174 (2008). Defendants did not file a motion to dismiss and

raised this argument for the first time in their motion for summary judgment. In response, plaintiff

conceded Greene and Voelker could not be liable on these claims under California law. The Court

therefore granted summary judgment as to those claims against Greene and Voelker. (7/24/2008

Order at 13.) 

Defendants argue naming Greene and Voelker in the discrimination and retaliation causes

of action was thus not authorized by FEHA and thus legally groundless. The Court rejects this

argument. Greene and Voelker were intimately involved in the allegedly discriminatory and

retaliatory acts. Indeed, they were properly named as defendants on plaintiff’s claim for

harassment based on the same facts. See Cal. Gov. Code § 12940(j)(3) (“An employee of an entity

subject to this subdivision is personally liable for any harassment prohibited by this section that is

perpetrated by the employee.”); Jones, 42 Cal. 4th at 1174. “Meritless” in this context does not

mean “simply that the plaintiff has ultimately lost his case.” Jersey v. John Muir Medical Center,

97 Cal. App. 4th 814, 831 (Cal. Ct. App. 2002) (citations omitted). Instead, it means “groundless

or without foundation.” Id. Plaintiff’s claims, although legally untenable, had adequate factual

foundation. There is no evidence suggesting plaintiff acted in bad faith, and the Court finds

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See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 435 n. 11 (1983) (“We agree with the District

Court’s rejection of ‘a mathematical approach comparing the total number of issues in the case with

those actually prevailed upon.’ Such a ratio provides little aid in determining what is a reasonable fee

in light of all the relevant factors.”).

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plaintiff named Greene and Voelker in those claims because of legal error, not in order to act

unreasonably, frivolously, or vexatiously. 

Moreover, even if plaintiff did act unreasonably, defendants do not show that the claims

erroneously brought against the individual defendants increased the attorneys’ fees incurred in the

case. Defendants request 10% of the total attorneys’ fees incurred, or $60,000. Defendants argue

10% is a conservative figure because claims against the individual defendants constituted about

30% of the number of claims in the case. But defendants do not offer any reason to conclude any

portion of the fees are attributable to the defense of the individual defendants. These fees would

have been incurred in defending Prudential against the retaliation and discrimination claims and

the individual defendants on the harassment claim. Defendants’ strict mathematical approach does

not consider the lack of an actual effect on the total fees incurred because of plaintiff’s error. The

Court therefore finds none of the requested fees were reasonably incurred in response to that

error.2

 Accordingly, the Court declines to award any fees under FEHA. 

CONCLUSION

For the foregoing reasons, the Court hereby DENIES defendants’ motion for attorneys’

fees. 

IT IS SO ORDERED.

DATED: October 8, 2008

IRMA E. GONZALEZ, Chief Judge

United States District Court

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