Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-00275/USCOURTS-cand-5_05-cv-00275-11/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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28 This disposition is not designated for publication and may not be cited. 1

Case No. C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES ETC.

(JFLC2)

**E-Filed 3/2/07**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

JULIE SCOTT,

 Plaintiff,

 v.

UNUM LIFE INSURANCE COMPANY OF

AMERICA, et al.,

 Defendants.

Case Number C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART 1

PLAINTIFF’S MOTION FOR

ATTORNEYS’ FEES, COSTS,

EXPENSES AND PREJUDGMENT

INTEREST; AND (2) DENYING

DEFENDANTS’ MOTION FOR

ATTORNEYS’ FEES AND COSTS

[re: doc. nos. 69, 74]

The parties have filed cross-motions for attorneys’ fees, costs and expenses. Plaintiff

additionally seeks prejudgment interest. The Court has considered the briefing as well as the oral

arguments presented at the hearing on March 2, 2007. For the reasons discussed below,

Plaintiff’s motion will be granted in part, and Defendants’ motion will be denied.

Case 5:05-cv-00275-JF Document 93 Filed 03/02/07 Page 1 of 6
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28 Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. 

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Case No. C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES ETC.

(JFLC2)

I. BACKGROUND

In this ERISA action, Plaintiff Julie Scott (“Scott”) sued Defendants Unum Life 2

Insurance Company of America (“Unum”) and Cisco Systems, Inc. Long-Term Disability Plan

(“the LTD Plan”) for wrongful denial of long-term disability benefits under the LTD Plan. Scott

asserted two claims: a claim for benefits under 29 U.S.C. § 1132(a)(1)(B) and a claim for

injunctive relief under § 1132(a)(3). The Court granted Defendants’ motion for judgment on the

pleadings as to the (a)(3) claim, and granted Defendant Unum’s motion for summary judgment as

to the (a)(1)(B) claim on the ground that Unum was not a proper party to that claim. The Court

granted summary judgment for Scott on her (a)(1)(B) claim against the LTD Plan, finding that

Scott was entitled to benefits for the period covered by the “own occupation” definition and

remanding for consideration of her entitlement to benefits for the period covered by the “any

occupation” definition.

Scott seeks attorneys’ fees, costs, expenses and prejudgment interest. Defendants

concede that Scott is entitled to an award of reasonable attorneys’ fees, but argue that her claim

for fees is inflated, that she is not entitled to fees incurred in prosecuting her ultimately

unsuccessful (a)(3) claim, and that she is not entitled to prejudgment interest. Defendants seek

fees and costs with respect to their defense of Scott’s (a)(3) claim.

II. LEGAL STANDARD

ERISA provides that a “court in its discretion may allow a reasonable attorney’s fees and

costs of action to either party.” 29 U.S.C. § 1132(g)(1). In general, a court considering whether

to award attorney’s fees and costs under ERISA must consider five factors: (1) the degree of the

opposing party’s culpability or bad faith; (2) the ability of the opposing party to satisfy an award

of fees; (3) whether an award of fees would deter others from breaching duties under similar

circumstances; (4) whether the party 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. Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453

Case 5:05-cv-00275-JF Document 93 Filed 03/02/07 Page 2 of 6
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Case No. C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES ETC.

(JFLC2)

(9th Cir. 1980); see also Landwehr v. DuPree, 72 F.3d 726, 739 n.5 (9th Cir. 1995). 

The Court has discretion to award prejudgment interest to an ERISA plaintiff. “Whether

to award prejudgment interest to an ERISA plaintiff is a question of fairness, lying within the

court's sound discretion, to be answered by balancing the equities.” Landwehr, 72 F.3d at 739

(internal citation and quotations omitted). 

III. DISCUSSION

A. Defendants’ Motion For Attorneys’ Fees And Costs

Defendants seek $29,307.51 in attorneys’ fees and costs related to their defense of Scott’s

ultimately unsuccessful (a)(3) claim. “[T]he Hummell factors very frequently suggest that

attorney’s fees should not be charged against ERISA plaintiffs.” San Francisco Culinary,

Bartenders and Service Employees Welfare Fund v. Lucin 76 F.3d 295, 297 (9th Cir. 1996)

(internal quotation marks and citations omitted). This case falls within that general rule. 

Although the Court granted judgment for Defendants on Scott’s (a)(3) claim, there is no

indication in the record that the (a)(3) claim was frivolous or brought in bad faith (factor 1). 

Scott is an individual suffering from a long-term disability; satisfaction of the requested fee

award likely would impose financial hardship upon her (factor 2). An award of fees against Scott

might deter plaintiffs from suing under ERISA in the future, but that is not the type of deterrence

the fee statute seeks to promote (factor 3). Defendants did not resolve any significant legal

questions (factor 4). Scott prevailed on the bulk of her claims; thus the parties’ positions in this

litigation do not favor an award of fees to Defendants (factor 5). Accordingly, Defendants’

motion will be denied.

B. Plaintiff’s Motion For Attorneys’ Fees, Costs, Expenses And Prejudgment Interest

Scott seeks $96,236.50 in attorneys’ fees, $1,631.61 in litigation costs and expenses, and

an additional $7,500 in attorneys’ fees for bringing the present motion, for a total award of

$105,368.11. She also seeks prejudgment interest.

The first three Hummell factors weigh in favor of a substantial attorneys’ fees award. The

Court finds some degree of culpability on the part of the LTD Plan (factor 1). While the Court’s

order of December 7, 2006, addressing the parties’ summary judgment motions, did not expressly

Case 5:05-cv-00275-JF Document 93 Filed 03/02/07 Page 3 of 6
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Case No. C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES ETC.

(JFLC2)

find bad faith on the part of the LTD Plan, the order did note the following: although Scott

became eligible for long-term disability benefits in July 2001, she was not even referred to

Unum’s long-term disability department until April 2002, at which time Unum began a new

investigation into her claim (after previously awarding short term disability benefits); Unum did

not render a decision on Scott’s long-term disability claim until January 2003, a year and a half

after Scott became eligible for long-term disability benefits; and then Unum denied Scott’s claim

even though all of the doctors concluded that she was disabled, basing its denial upon a

functional capacity evaluation that was conducted by a person who was not a doctor and that did

not apply the proper “own occupation” standard of disability. Moreover, the LTD Plan clearly

can satisfy an award of attorneys’ fees (factor 2). An award of fees might well deter the LTD

Plan from future excessive delays and sloppiness in evaluating benefits claims (factor 3). 

Factors 4 and 5 support a modest reduction in the requested fee award. The claim on

which Scott prevailed was solely for her own benefit, not for the benefit of plan participants as a

whole (factor 4). Moreover, while Scott substantially prevailed in this action, she did not prevail

on her (a)(3) claim (factor 5). As discussed above, the Court is not inclined to award attorneys’

fees to Defendants based upon Scott’s failure to prevail on the (a)(3) claim, but the Court will

consider this failure as one of the equities that should be balanced in arriving at an appropriate

fee award.

Defendants argue that additional reductions in the proposed award should be made

because Scott’s attorneys’ hourly rates are excessive and there was duplication of effort when

both a partner and an associate attended certain events. The Court concludes that the hourly rates

charged by Scott’s attorneys are reasonable in light of their expertise in the area. The Court notes

that these attorneys’ normal rates previously have been approved in other cases. The Court is not

persuaded that the attendance of both a partner and an associate at hearings necessarily

constitutes duplication of effort that justifies a reduction in fees. Accordingly, the Court will

award the substantial majority of the fees and costs requested, less an appropriate reduction to

reflect the parties’ positions on the (a)(3) claim. Having examined the parties’ briefs on this

latter issue, as well as the records submitted by Scott’s counsel, the Court concludes that an

Case 5:05-cv-00275-JF Document 93 Filed 03/02/07 Page 4 of 6
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Case No. C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES ETC.

(JFLC2)

award of attorneys’ fees, costs and expenses in the total amount of $80,000 is fair and

reasonable.

Defendants argue that an award in this amount would be unreasonable, given that only

$48,785 in benefits were at issue in this case. This argument is unpersuasive. The fact that Scott

was required to incur more than $100,000 in attorneys’ fees was the result of Defendants’ refusal

to acknowledge that their denial of benefits was wrongful. Scott was entitled to benefits

commencing in July 2001. It is now March 2007, and based upon the record before the Court, it

appears that Scott still has not been paid the benefits to which she is entitled. Accordingly, the

Court is untroubled by the fact that the award for fees and costs exceeds the benefits that Scott

recovered in this action.

The Court also concludes that an award of prejudgment interest is appropriate given the

lengthy delay in payment of benefits for which Scott became eligible in 2001. The Ninth Circuit

has held that when an award of prejudgment interest is appropriate in ERISA cases, “the interest

rate prescribed for post-judgment interest under 28 U.S.C. § 1961 is appropriate for fixing the

rate of pre-judgment interest unless the trial judge finds, on substantial evidence, that the equities

of that particular case require a different rate.” Grosz-Salomon v. Paul Revere Life Ins. Co., 237

F.3d 1154, 1164 (9th Cir. 2001). The Court is not persuaded that the equities in this case require

a different rate, and so will award prejudgment interest with respect to the benefits at the federal

rate set forth in 28 U.S.C. § 1961.

IV. ORDER

(1) Plaintiff’s motion is GRANTED IN PART AND DENIED IN PART. Plaintiff is

awarded a total of $80,000 in reasonable attorneys’ fees, costs and expenses, plus

prejudgment interest at the rate set forth in 28 U.S.C. § 1961; and

(2) Defendants’ motion is DENIED.

DATED: 3/2/07

__________________________________

JEREMY FOGEL

United States District Judge

Case 5:05-cv-00275-JF Document 93 Filed 03/02/07 Page 5 of 6
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Case No. C 05-275 JF (PVT)

ORDER (1) GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES ETC.

(JFLC2)

This Order was served on the following persons:

Horace W. Green horaceg@lifehealthlaw.com, zhongl@lifehealthlaw.com

Claire Kennedy-Wilkins ckwilkins@lewisfeinberg.com, celder@lewisfeinberg.com;

vmartin@lewisfeinberg.com

Teresa S. Renaker trenaker@lewisfeinberg.com, celder@lewisfeinberg.com;

vmartin@lewisfeinberg.com

Joanne M. Ryan joanner@lifehealthlaw.com, zhongl@lifehealthlaw.com, ;

markh@lifehealthlaw.com, ; horaceg@lifehealthlaw.com

Cassie Springer-Sullivan cssullivan@lewisfeinberg.com, vmartin@lewisfeinberg.com;

celder@lewisfeinberg.com; esimon@lewisfeinberg.com

Case 5:05-cv-00275-JF Document 93 Filed 03/02/07 Page 6 of 6