Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-97-07040/USCOURTS-caDC-97-07040-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 18, 1997 Decided February 27, 1998 

No. 97-7040

BOARD OF TRUSTEES OF THE HOTEL AND RESTAURANT EMPLOYEES 

LOCAL 25 AND EMPLOYERS' HEALTH AND 

WELFARE FUND, ET AL.

APPELLANTS

v.

JPR, INC.,

APPELLEE

Appeal from the United States District Court 

for the District of Columbia 

(No. 96cv01028)

Daniel M. Katz argued the cause and filed the briefs for 

appellants. Ellen G. Ranzman entered an appearance.

Malcolm L. Pritzker argued the cause and filed the brief 

for appellee. Steven R. Semler entered an appearance.

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Before: EDWARDS, Chief Judge, WALD and RANDOLPH, 

Circuit Judges.

Opinion for the Court filed by Circuit Judge WALD.

Opinion concurring in part and dissenting in part filed by 

Circuit Judge RANDOLPH.

WALD, Circuit Judge: This appeal is brought by the Boards 

of Trustees of two employee benefit plans, (1) the Hotel and 

Restaurant Employees Local 25 and Employers' Health and 

Welfare Fund, and (2) the Hotel and Restaurant Employees 

Local 25 and Hotel Association, Cafeteria and Other Subscribing Employers Group Legal Services Fund. (We will 

refer to the two plans as "the Funds," and to their Boards of 

Trustees collectively as "the Trustees.") The Trustees prevailed in an action in the district court in which they sought to 

collect underpayments to the Funds by JPR, Inc. ("JPR"), 

the entity that operates the Washington, D.C. restaurant La 

Colline. In addition to recovering the shortfall in payments, 

they collected interest, liquidated damages, litigation expenses, and attorney's fees. The district court declined, 

however, to award the Trustees auditing fees, and awarded 

attorney's fees only at the rate actually charged, rather than 

at market rates. The Trustees appeal these two rulings. We 

affirm the first, but reverse the second, finding that the 

district court must consider whether the fees charged by the 

Trustees' attorney incorporated a public-spirited discount, 

and, if so, award fees at market rates.

I. BACKGROUND

The Funds were established by agreement between Local 25 

of the Hotel & Restaurant Employees Union ("the Union") 

and the Hotel Association of Washington, D.C. (the "Hotel 

Association"); the Trustees who administer the Funds are 

drawn from representatives of both parties. The Union 

represents a bargaining unit of employees of La Colline, and 

JPR is a member of the Hotel Association. The collective 

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bargaining agreement between the Union and JPR requires 

JPR to make a specified contribution to the Funds for every 

hour worked by an employee.

The documents establishing the Funds are called the "Dental and Optical Care Plan Trust Agreement" 1

and the "Group 

Legal Services Plan Trust Agreement." Each of these agreements requires participating employers to make contributions 

to the appropriate Fund, and permits the Trustees of that 

Fund to audit employers' records in order to ensure that the 

correct contributions have been made. The Trustees periodically conduct routine audits of participating employers to 

assure that they are making the appropriate contributions.

This case arises out of such a routine audit, that of JPR's 

contributions to the Funds from 1992 to 1994. The audit 

revealed a total shortfall of $36,162.88. The Trustees attempted to persuade JPR to pay this sum voluntarily, and 

then filed suit to compel JPR to do so, bringing claims under 

the Employee Retirement Income Security Act ("ERISA") 

and the National Labor Relations Act. JPR raised three 

affirmative defenses: first, that no payments were due for 

employees in their first three months of employment; second, 

that some of the employees were covered by other insurance 

and that no contributions were needed on their behalf; and 

third, (in a variation of the second argument) that it need not 

make contributions for dental insurance which it asserted was 

duplicative. The Trustees moved for summary judgment, 

and the district court granted the motion, finding none of 

JPR's defenses to be meritorious. JPR did not appeal this 

ruling.

ERISA provides that "in any action under this subchapter 

by a fiduciary for or on behalf of a plan to enforce section 

1145 of this title in which a judgment in favor of the plan is 

awarded, the court shall award the plan" an enumerated list 

of elements of damages. 29 U.S.C. § 1132(g)(2) (1994). The 

__________

1 The title of this agreement reflects the former name of the 

Health and Welfare Fund.

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Trustees' action was within this section, as it was brought, 

inter alia, to enforce 29 U.S.C. § 1145, a provision that 

relates to delinquent contributions.2 Accordingly, in addition 

to recovering the overdue amount, the Trustees sought, and 

the district court awarded, (1) interest (at 18%), (2) duplicate 

interest in lieu of liquidated damages, (3) litigation expenses, 

and (4) attorney's fees.

The district court declined, however, to award $9,066 in 

audit fees sought by the Trustees. The Trustees also argued 

that the amount of attorney's fees charged by their counsel, 

$17,775, reflected a large charitable discount from market 

rates, and that they should receive an award at the market 

value of their counsel's legal services, which they claimed was 

$43,068.75. The district court did not accept this argument, 

and awarded only the actual amount of fees charged. These 

two decisions are now before us on appeal.

II. ANALYSIS 

We have often been warned that "[a] request for attorney's 

fees should not result in a second major litigation." Hensley 

v. Eckerhart, 461 U.S. 424, 437 (1983). Clearly, the district 

court is most familiar with the interstices of the litigation, and 

we accord its decisions considerable deference. See id. at 

437. Our review of its fee awards is confined to correcting 

errors of law and remedying abuses of discretion. See Covington v. District of Columbia, 57 F.3d 1101, 1110 (D.C. Cir. 

1995); see also Pierce v. Underwood, 487 U.S. 552, 571 (1988) 

(stating that "it is well established that the abuse-ofdiscretion standard applies" to review of a district court's 

award of fees).

__________

2 Section 1145 provides: "Every employer who is obligated to 

make contributions to a multiemployer plan under the terms of the 

plan or under the terms of a collectively bargained agreement shall, 

to the extent not inconsistent with law, make such contributions in 

accordance with the terms and conditions of such plan or such 

agreement." 29 U.S.C. § 1145 (1994). The Funds are multiemployer plans.

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A. Audit Fees

The Trustees sought two types of audit fees in the district 

court: (1) the costs of the routine audit that discovered JPR's 

shortfall in payments, and (2) fees for 24 hours of work 

performed in connection with the merits of the delinquency 

litigation before the district court. The district court denied 

both categories of audit fee, for reasons that we conclude 

were correct.

1. Costs of the Routine Audit

The Trust Agreement establishing the Health and Welfare 

Fund contains a provision entitled "Default and Payment" 

which provides that, in the event of "failure to pay such 

monthly contributions in full within the time above provided,"

any person in default may be required at the discretion 

of the Trustees to pay as liquidated damages such 

amounts as the Trustees may determine, including interest up to the maximum permitted by law, together with 

all expenses of collection incurred by the Trustees, including, but not limited to reasonable counsel fees, auditing fees, and court costs, and any other lawful charges 

for late payment as the Trustees may determine.

The Trust Agreement establishing the Legal Services Fund 

contains a provision that is, for our purposes, identical (it 

contains minor differences of wording). Because the two 

provisions are equivalent, we will refer to them together as 

"the" Default and Payment Clause.

ERISA requires that "[e]very employer who is obliged to 

make contributions to a multiemployer plan ... make such 

contributions in accordance with the terms and conditions of 

such plan ...," 29 U.S.C. § 1145 (1994), and permits Plan 

fiduciaries to bring suit to "enforce ... the terms of the 

plan." 29 U.S.C. § 1132(a)(3) (1994). Thus, if the Default 

and Payment Clause requires employers who are in default to 

pay routine auditing fees, ERISA empowers the Trustees to 

enforce that requirement. See Iron Workers District Council 

v. Hudson Steel Fabricators & Erectors, Inc., 68 F.3d 1502, 

1507 (2d Cir. 1995). The district court concluded that the 

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Default and Payment Clause did not include such a requirement, and hence declined to award routine auditing fees.

We review questions of the proper interpretation of ERISA 

plans de novo. See Carey Canada, Inc. v. Columbia Cas. Co.,

940 F.2d 1548, 1554 (D.C. Cir. 1991). The Trustees point to 

the Default and Payment Clause's statement that they may 

collect "all expenses of collection incurred by the Trustees, 

including, but not limited to reasonable counsel fees, auditing 

fees, and court costs," and argue that this allows them to 

collect all auditing fees, including the costs of the routine 

audit that discovered an underpayment. We do not think so. 

This passage only permits the Trustees to recoup those 

"auditing fees" that qualify as "expenses of collection." An 

"expense of collection," as that phrase is usually understood, 

is an expense that results from collection efforts. The Trustees have pointed to no evidence that this phrase means 

something different here. The fact that the Default and 

Payment Clause also lists "reasonable counsel fees" and 

"court costs" as types of "expenses of collection" confirms our 

reading; both are costs that are only incurred as a result of 

collection efforts. (This is an application of ejusdem generis,

the canon of construction that states that "a general statutory 

term should be understood in light of the specific terms that 

surround it." Hughey v. United States, 495 U.S. 411, 419 

(1990).)

This is not to say that auditing fees may never qualify as 

"expenses of collection." Fees for non-routine follow-up audits performed as a part of the collection process are clearly 

included in the term. An audit that began as routine might 

also abruptly change its stripes and become a non-routine 

audit, if auditors discovered inconsistencies during their work 

and did extra work to untangle them. Because such detective 

work would be motivated by the desire to collect an underpayment, rather than by the need to perform a routine audit, 

it could fairly be called an "expense of collection." There is 

no allegation of this kind here, however; the Trustees' audit 

of JPR seems to have cost no more than would a routine audit 

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of any other employer.3

The Fifth Circuit has construed a similar plan provision

which also allowed the Trustees to recover all "expenses of 

collection"to allow reimbursement of routine audit fees. 

See Carpenters Amended and Restated Health Benefit Fund 

v. Ryan Constr. Co., 767 F.2d 1170, 1175 (5th Cir. 1985). 

Ryan found that the costs of the routine audit were "expenses of collection" because an audit is "a necessary first 

step in collection of any delinquency." Id. at 1175-76. We 

believe the reasoning of Ryan proves too much. By Ryan 's 

logic, the Trustees should also be able to put in for a host of 

other expenses that are "necessary" to the initiation of collection efforts, i.e., the cost of their own salaries, as collection 

efforts are impossible without effective supervision of the 

auditors and of the Funds' finances. The test is not whether 

an expenditure is a necessary precondition to collection efforts, but rather the reverse, whether collection efforts 

prompted the expenditure.4

2. Litigation-Related Auditing Expenses

The district court declined to grant the Trustees' request 

for reimbursement for 24 hours of litigation-related auditing 

__________

3 The Trustees argue that JPR's unusual recordkeeping practices 

increased the costs of the routine audit. But there is no indication 

that JPR adopted its recordkeeping practices in order to conceal 

underpayments, or that there is any other link between those 

practices and JPR's underpayment.

4 The Default and Payment Clause also states that "any person in 

default may be required at the discretion of the Trustees to pay as 

liquidated damages such amounts as the Trustees may determine...." The Trustees have not argued that this language entitles them to recover routine audit fees, and we therefore have not 

considered that question. Nor have the Trustees claimed that they 

should have received audit fees under ERISA's provision permitting 

the court to award "such other legal or equitable relief as the court 

deems appropriate." 29 U.S.C. § 1132(g)(2)(E); see also Operating 

Engineers Pension Trust v. A-C Co., 859 F.2d 1336, 1342-43 (9th 

Cir. 1988) (finding that audit fees may be awarded under this 

provision).

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expenses, finding that the hours spent were "more in the 

nature of litigation support than audit services, ... and in 

any event are inadequately supported." We find that the 

district court was within its discretion in concluding that this 

request for reimbursement was inadequately supported. We 

therefore do not consider whether litigation support services 

are compensable under section 1132(g)(2). But cf. Missouri 

v. Jenkins, 491 U.S. 274, 285 (1989) (finding that an award of 

a "reasonable attorney's fee" under 42 U.S.C. § 1988 may 

include the services of paralegals).

A plaintiff seeking attorney's fees under section 1983 must 

demonstrate that the hours billed were reasonably expended 

in pursuit of the litigation. "Counsel for the prevailing party 

should make a good-faith effort to exclude from a fee request 

hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated 

to exclude such hours from his fee submission." Hensley, 461 

U.S. at 434. "[I]f the district court finds that the attorney 

failed to exercise billing discretion with respect to any of the 

hours [claimed], the court may reject those hours as not 

reasonably expended." Goos v. National Association of Realtors, 68 F.3d 1380, 1387 (D.C. Cir. 1995). The weaker the 

apparent need for a particular activity, the higher the evidentiary hurdle a claimant must cross in order to demonstrate 

that it was in fact performed in a reasonable effort to pursue 

the litigation.

The Trustees have failed to meet this standard of reasonableness. Sixteen hours of the twenty-four were consumed in 

preparing for the Trustees' summary judgment motion, mostly on two declarations. The Trustees have not attempted to 

provide us with any explanation of the need for these declarations, and their purpose is not obvious, given that the results 

of the audit appear not to have been in controversy. The 

remaining eight hours were used to compile two tables, one 

calculating the interest due on JPR's underpayments, and the 

other listing the hours of work performed by particular 

auditors and their hourly rates. Although the purpose of 

these tables is more clear, it is incomprehensible that their 

preparation could have consumed anywhere near eight hours. 

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The appropriate course in such circumstances is often to 

allow a part of the requested time. Here, however, the 

allowable amount of timeperhaps two hourswould be de 

minimus, especially when considered in relation to the Trustees' fee request as a whole. Accordingly, we see no need to 

disturb the district court's decision to disallow this claim 

altogether.

B. Attorney's Fees

The Trustees argued before the district court that their 

attorney's hourly rate had been substantially discounted for 

public-spirited reasons, and that they were therefore entitled 

to an award of fees based on the market value of the services 

he performed, not on the amount that he actually charged. 

They asserted that the market value of their attorney's 

services is $43,068.75, and sought an award in that amount. 

The Trustees' attorney said at oral argument that the Funds 

would remit to him any amount awarded in excess of his 

actual fees.5

The district court concluded that, despite some authority 

permitting plaintiffs to recover fees at market rates even if 

they actually paid their counsel lesser amounts, see, e.g., 

Covington, 57 F.3d at 1107, such an exception is limited to 

awards of fees under 42 U.S.C. § 1988 (the governing statute 

in Covington), and does not apply to this case. Accordingly, 

the district court awarded only the amount actually charged 

by the Trustees' attorney, $17,775.

__________

5 We therefore need not consider the potential applicability of 

National Treasury Employees Union v. United States Department 

of the Treasury, 656 F.2d 848 (D.C. Cir. 1981), which found, citing 

the restrictions on fee-splitting in the ABA's Code of Professional 

Responsibility, that it was impermissible to make an award of 

attorney's fees to a union in excess of the actual cost to the union of 

the attorney's services. See id. at 851-53; but cf. ABA Comm. on 

Ethics and Professional Responsibility, Formal Op. 93-374 (1993) 

(interpreting Model Rule of Professional Conduct 5.4 to permit the 

sharing of court-awarded fees for a pro bono representation between an attorney and a non-profit client).

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We begin by assuming that the Trustees' attorney, for 

public-spirited reasons, provided his services to the Trustees 

at a discount. Assuming this to be the case, we find the 

Trustees entitled to a fee award at the market value of their 

services, rather than at the actual rate they were charged. 

We then discuss how the district court is to decide whether 

the fee charged did in fact incorporate a public-spirited 

discount, and, if so, how it should determine the market rate 

in making the award in this case.

1. Market Rate or Actual Rate?

ERISA provides that, in actions to collect unpaid contributions in which the plan is successful, the court "shall award to 

the plan ... (D) reasonable attorney's fees and costs of the 

action, to be paid by the defendant." 29 U.S.C. § 1132(g)(2). 

The usual method of calculating reasonable attorney's fees is 

to multiply the hours reasonably expended in the litigation by 

a reasonable hourly fee, producing the "lodestar" amount. 

See Pennsylvania v. Delaware Valley Citizens' Council for 

Clean Air, 478 U.S. 546, 564 (1986) ("Delaware Valley" ). 

This amount may then be adjusted by a multiplier "in certain 

'rare' and 'exceptional' cases," see id. at 565 (quoting Blum v. 

Stenson, 465 U.S. 886, 898-901 (1984)), although there is a 

"strong presumption that the lodestar figure ... represents a 

'reasonable' fee." Id.

The issue we are concerned with here is what constitutes a 

"reasonable hourly fee" for purposes of the lodestar calculation. This court held in Save Our Cumberland Mountains, 

Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988) (in banc) 

("SOCM "), and reaffirmed in Covington, 57 F.3d at 1107, that 

a party whose attorney charges a discounted rate for publicspirited reasons may nevertheless receive an award of fees at 

market rates. The rationale of those cases is not, as the 

district court concluded, limited to actions under section 1988; 

indeed, although SOCM drew extensively on the legislative 

history of section 1988, SOCM itself involved an award under 

a fee-shifting provision of the Surface Mining Control and 

Reclamation Act. SOCM applied section 1988 jurisprudence 

to the interpretation of this statute on the authority of 

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Delaware Valley, in which the Supreme Court found that it 

was appropriate to apply section 1988 caselaw in construing a 

fee-shifting provision of the Clean Air Act because both 

provisions had as their "common purpose" to "promote citizen 

enforcement of important federal policies." 478 U.S. at 560; 

see also SOCM, 857 F.2d at 1519 n.1 (citing the panel opinion 

in that case, Save Our Cumberland Mountains, Inc. v. Hodel,

826 F.2d 43, 47 (D.C. Cir. 1987), which in turn cited this 

passage of Delaware Valley ).

Delaware Valley thus endorses the application of law developed under section 1988 to other fee-shifting provisions that 

have the same citizen-enforcement purpose. Since Delaware 

Valley, the Court has twice clarified when it is appropriate to 

apply caselaw developed under one fee-shifting provision to 

another such provision. First, in Independent Federation of 

Flight Attendants v. Zipes, 491 U.S. 754 (1989), the Court 

observed that "fee-shifting statutes' similar language is a 

strong indication that they are to be interpreted alike," and 

drew on caselaw under one fee-shifting provision of the Civil 

Rights Act of 1964 in interpreting another fee-shifting provision of the same statute. Id. at 758 n.2.

Conversely, in Fogerty v. Fantasy, Inc., 510 U.S. 517 

(1994), the Court found that the "normal indication" of Zipes

could be "overborne" if the factors that justify a fee-shifting 

rule in one context, such as the purpose or legislative history 

of a statute, are absent in another. Id. at 523. Fogerty

involved the interpretation of 17 U.S.C. § 505, a fee-shifting 

statute applicable to copyright infringement actions. The 

wording of this provision is virtually identical to that of a feeshifting provision for Title VII of the Civil Rights Act of 1964, 

42 U.S.C. § 2000e-5(k). Under caselaw interpreting section 

2000e-5(k), there is a presumption that prevailing plaintiffs

but not prevailing defendantswill receive an award of fees. 

See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 418 

(1978). But the Fogerty Court found that it was not appropriate to apply the section 2000e-5(k) presumption to section 

505, despite the similarity of language between the two 

provisions, because there was no indication in section 505's 

legislative history that Congress intended plaintiffs and deUSCA Case #97-7040 Document #333751 Filed: 02/27/1998 Page 11 of 29
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fendants to be treated differently for purposes of fee awards. 

The Court also concluded that the purpose of the Copyright 

Actencouraging the production of creative worksis not 

obviously served by favoring plaintiffs over defendants in 

copyright infringement actions, especially given that "corporate behemoths" and "starving artists" are to be found among 

both the plaintiffs and the defendants in infringement actions. 

510 U.S. at 524 (citation omitted).

The inquiry prescribed by Zipes, Fogerty and Delaware 

Valley does not differ that much from our usual processes of 

statutory interpretation. The first step, of course, is to 

consult the text of the statute; thus, Zipes' s rule that "feeshifting statutes' similar language is a strong indication that 

they are to be interpreted alike," 491 U.S. at 758 n.2. The 

next step is to consider the statute's purpose, structure, and 

legislative history; this explains Fogerty 's rule that the "normal indication" of Zipes can in some circumstances be "overborne" on the basis of contextual evidence. 510 U.S. at 523. 

Delaware Valley comes into play at this stage; it defines one 

category of statutesthose intended to "promote citizen enforcement of important federal policies," 478 U.S. at 560as 

having a "common purpose" and therefore presumptively to 

be interpreted similarly. See Lyle v. Food Lion, Inc., 954 

F.2d 984, 988 n.1 (4th Cir. 1992) (citing Delaware Valley in 

applying section 1988 caselaw to a fee-shifting provision of the 

Fair Labor Standards Act).6

Should our case fit securely within Delaware Valley, our 

analysis would be at an end, as SOCM would apply directly. 

__________

6 Delaware Valley 's suggestion that a broad group of fee-shifting 

provisions should all be subject to the same set of legal standards 

may also have been based on the assumption that this would limit 

parties' incentives to litigate fee disputes. Cf. Hensley v. Eckerhart, 461 U.S. 424, 455 (1983) (Brennan, J., concurring in part and 

dissenting in part) (comparing appellate litigation of fee disputes to 

"a Frankenstein's monster" that "meanders its well-intentioned way 

through the legal landscape leaving waste and confusion (not to 

mention circuit splits) in its wake"). In this respect, then, the 

interpretation of fee-shifting statutes may differ from the usual 

practice of statutory interpretation.

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But, alas, it is not that easy. Section 1132(g)(2) is not 

intended to promote enforcement of important federal policies 

by "citizens," because recoveries under section 1132(g)(2) are 

limited to plan fiduciaries, see 29 U.S.C. § 1132(g)(2) ("In any 

action under this subchapter by a fiduciary for or on behalf of 

a plan ...") (emphasis added), a group that at first glance 

seems less in need of favorable fee-shifting rules than the 

citizenry at large.

That section 1132(g)(2) does not fit squarely within the four 

corners of Delaware Valley does not necessarily foreclose the 

application of SOCM; it does, however, require that we 

consider the specific text and purposes of section 1132(g)(2) to 

decide whether SOCM 's market-rate standard applies. We 

turn to Zipes and Fogerty for guidance. As in Zipes, the text 

of section 1132(g)(2) does parallel that of section 1988; both 

provide for a "reasonable" fee. Next, as Fogerty commands, 

we turn to the statute's purposes and legislative history to see 

whether the presumption that section 1132(g)(2) is to be 

interpreted in line with section 1988 is "overborne" by contrary evidence.

Section 1132(g)(2) was enacted as part of the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"). In 

enacting the MPPAA, Congress was responding to an increase in the financial instability of multiemployer pension 

plans, a problem it believed would continue to escalate unless 

action was taken. H.R. REP. NO. 96-869, pt. 1 at 52-57 (1980) 

("House Report"). The MPPAA put into place a number of 

measures intended to "protect retirees and workers who are 

participants in [multiemployer pension] plans against the loss 

of their pensions," id. at 51, including provisions that altered 

the funding requirements for multiemployer plans, required 

withdrawing employers to contribute to a plan's unfunded 

obligations, and adjusted the insurance provided by the Pension Benefit Guaranty Corporation. See id. at 65-70; see 

also Milwaukee Brewery Workers' Pension Plan v. Jos. 

Schlitz Brewing Company, 115 S. Ct. 981, 985 (1995) (reviewing Congress's goals in enacting the MPPAA).

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Although most of the provisions of the MPPAA as enacted 

tracked the bill that originated in the House of Representatives, H.R. 3094, the language of section 1132(g)(2) originated 

in the Senate bill, S. 1076. The following passage explains 

the Senate's understanding of the meaning of its language:

Delinquencies of employers in making required contributions are a serious problem for most multiemployer 

plans. Failure of employers to make promised contributions in a timely fashion imposes a variety of costs on 

plans. While contributions remain unpaid, the plan loses 

the benefit of investment income that could have been 

earned if the past due amounts had been received and 

invested on time. Moreover, additional administrative 

costs are incurred in detecting and collecting delinquencies. Attorneys fees and other legal costs arise in connection with collection efforts.

These costs detract from the ability of plans to formulate or meet funding standards and adversely affect the 

financial health of plans. Participants and beneficiaries 

of plans as well as employers who honor their obligation 

to contribute in a timely fashion bear the heavy cost of 

delinquencies in the form of lower benefits and higher 

contribution rates. Moreover, in the context of this 

legislation, uncollected delinquencies can add to the unfunded liability of the plan and thereby increase the 

potential withdrawal liability for all employers.

Recourse available under current law for collecting 

delinquent contributions is insufficient and unnecessarily 

cumbersome and costly. Some simple collection actions 

brought by plan trustees have been converted into 

lengthy, costly and complex litigation concerning claims 

and defenses unrelated to the employer's promise and 

the plans' entitlement to the contributions. This should 

not be the case. Federal pension law must permit 

trustees of plans to recover delinquent contributions 

efficaciously. Sound national pension policy demands 

that employers who enter into agreements providing for 

pension contributions not be permitted to repudiate their 

pension promises.

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The public policy of this legislation to foster the preservation of the private multiemployer plan system mandates that provision be made to discourage delinquencies 

and simplify delinquency collection. The bill imposes a 

Federal statutory duty to contribute on employers that 

are already contractually obligated to make contributions 

to multiemployer plans. A plan sponsor that prevails in 

any action to collect delinquent contributions will be 

entitled to recover the delinquent contributions, court 

costs, attorney's fees, and double interest on the contributions owed. The intent of this section is to promote 

the prompt payment of contributions and assist plans in 

recovering the costs incurred in connection with delinquencies.

STAFF OF SENATE COMMITTEE ON LABOR AND HUMAN RESOURCES, 

96TH CONG., 2D SESS., S. 1076: THE MULTIEMPLOYER PENSION 

PLAN AMENDMENTS ACT OF 1980: SUMMARY AND ANALYSIS OF 

CONSIDERATION, at 43-44 (Comm. Print 1980) (hereinafter 

"Senate Committee Print").7In the debates surrounding the 

enactment of the final version of the MPPAA, Representative 

Thompson, one of the sponsors of H.R. 3094, repeated this 

passage essentially verbatim on the floor of the House. 125 

CONG. REC. 23,038, 23,039 (1980).

We draw three lessons from section 1132(g)(2)'s text, purposes, and legislative history.8 First, in enacting section 

__________

7 The district court in Central States, Southeast and Southwest 

Areas Pension Fund v. Alco Express Co., 522 F. Supp. 919, 927-28 

(E.D. Mich. 1981) ("Central States"), in the course of a detailed 

review of the legislative history of section 1132(g)(2), explained that 

"[b]ecause S. 1076 was also referred to the Senate Committee on 

Finance there was no formal committee report, since Senate Rule 

XXVII requires a joint report under such circumstances." 522 

F. Supp. at 928 n.11.

8 The above-quoted legislative history of section 1132(g)(2) refers 

in places to "pension plans," presumably because most of the 

MPPAA related only to pension plans, not to welfare benefit plans, 

the other type of employee benefit plan covered by ERISA. See 

29 U.S.C. § 1002(3). The Funds are both welfare benefit plans. 

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1132(g)(2), Congress had a strong goal of "discourag[ing] 

delinquencies" and rendering delinquency collection less 

"cumbersome and costly." Senate Committee Print, at 44. 

Deterring parties from prolonging litigation is an important 

goal of most fee-shifting provisions. Here, however, Congress's desire to achieve this goal was especially strong. 

Section 1132(g)(2) provides that the courts "shall" award fees 

to fiduciaries when judgments are awarded in their favor in 

delinquent-contribution actions. It makes no provision for 

prevailing defendants.9

In statutes protecting economic interests, mandatory feeshifting is uncommon, and the same standards are usually 

applied to fee awards to both plaintiffs and defendants. See, 

e.g., Fogerty, 510 U.S. at 534 (concluding that fee-shifting 

under the Copyright Act is discretionary, and that the same 

standard should be applied in considering fee awards to both 

parties); id. at 525 n.12 (indicating that "courts have generally awarded attorney's fees in an evenhanded manner based on 

the same criteria" under the trademark and patent laws); 

Eddy v. Colonial Life Ins. Co. of America, 59 F.3d 201, 205 

(D.C. Cir. 1995) ("In general, statutes protecting economic 

interests that contain fee-shifting provisions vesting discretion in the district court do not create a presumption that a 

prevailing party will be awarded fees."). Congress's express 

requirement that the courts award fees to fiduciaries who win 

delinquent-contribution actions demonstrates an unusually 

powerful intent to deter excessive litigation by defendants. A 

rule that requires employers to pay the market rate in cases 

in which an attorney has discounted her fees for publicspirited reasons surely serves this goal better than does one 

__________

Congress clearly signalled, however, that section 1132(g)(2) be 

interpreted in the same way whether welfare or pension plans were 

involved. The text of section 1132(g)(2) as enacted is equally 

applicable to both types of plans, as was the draft provision that 

was before the committee; much of the above-quoted legislative 

history is likewise equally applicable to both types of plans.

9 They must therefore invoke 29 U.S.C. § 1132(g)(1), which allows 

the court to make a fee award "in its discretion." Id.

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under which only fees actually paid out are recoverable. If a 

plan receives legal services from its attorneys for free, then 

the actual-cost rule would require the delinquent employer to 

pay nothinga result clearly inconsistent both with Congress's desire to deter employers from late payment and with 

the statute's requirement that the court "shall" award "reasonable attorney's fees." Likewise, the fact that a plan 

receives its legal services at a deep discount should not justify 

a similar discount of section 1132(g)(2)'s deterrent effect.10

A second important goal of fee-shifting provisions is to 

enable parties to hire "competent counsel" to pursue their 

cases. SOCM, 857 F.2d at 1521 (emphasis omitted) (citing 

section 1988's legislative history); see also Kay v. Ehrler, 499 

U.S. 432, 436 & n.8 (1991). Although this goal is not explicitly stated in the legislative history of section 1132(g)(2), Congress did express a strong desire to "simplify delinquency 

collection" and "assist plans in recovering the costs incurred 

in connection with delinquencies," Senate Committee Print, at 

44, goals that are best served if plan fiduciaries are able to 

hire competent counsel. Again, a fee-shifting rule that requires delinquent employers to pay market rates serves this 

purpose better than does one under which they pay only the 

billed rate.11 In this case, the plan has agreed to pass on the 

entire amount of any fee award to its attorneys. Such an 

arrangement obviously improves the ability of plans to obtain 

__________

10 Indeed, the plans that are closest to insolvency, and therefore 

need the deterrent effect of section 1132(g)(2) the most, would be 

most harmed by an actual-cost rule, as they are also the group that 

is likeliest to seek, and obtain, discounted legal services.

11 Our dissenting colleague says that we assume mistakenly that 

"expensive counsel necessarily equals competent counsel." Diss. 

op. at 2. We do not deny that there exist expensive, incompetent 

counsel; but there is ordinarily a correlation between an attorney's 

rates and her competence. The lodestar approach to setting legal 

fees is premised on the idea that there is a market for legal 

services, in which an attorney's hourly rate is correlated with her 

abilities. SOCM similarly assumed that market rate fees are 

needed to attract competent attorneys in complex cases. See 857 

F.2d at 1521.

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high-quality legal representation in the first instance. Indeed, a plan that is near insolvencyas one of the plans at 

issue in this case, the Legal Services Plan, apparently was in 

early 199512might otherwise find it quite difficult to secure 

the assistance of competent legal counsel in returning it to 

stability. On this point, we note that Congress enacted the 

MPPAA in order to stabilize financially ailing ERISA plans, 

see House Report, at 52-57; Senate Committee Print, at 1, 

and intended section 1132(g)(2) to further that objective, see

Senate Committee Print, at 44 (referring to "the public policy 

of this legislation to foster the preservation of the private 

multiemployer plan system").

Congress's preeminent purpose, in enacting section 

1132(g)(2), to keep ERISA plans solvent also points us in the 

direction of reading section 1132(g)(2) in a way that facilitates, rather than impedes, private charitable donations to 

plans. If an attorney has made a public-spirited decision to 

charge a plan a discounted rate, a delinquent employer should 

not receive the benefit of this decision. Judge Easterbrook in 

the Seventh Circuit has endorsed this point:

Some lawyers dedicate their professional lives to causes 

they find admirable and worthy of supportto legal 

services for the poor, to the representation of unions. 

These lawyers are making contributions to their favored 

causes, not in money, but in time.... Using opportunity 

cost as the measure of legal services means that the 

value of the lawyer's gift inures to the favored cause, and 

not to the adversary in litigation.

Barrow v. Falck, 977 F.2d 1100, 1105 (7th Cir. 1992). In this 

case, of course, the Trustees' attorney would receive any fees 

in excess of the amount billed; but the Trustees would benefit 

indirectly from such an award (as the award would presumably make it easier for them to obtain competent counsel in 

__________

12 In January, 1995, the Legal Services Fund's assets stood at 

$1,218. The Fund's present attorneys responded by adjusting their 

billing; they charged only when collection efforts were successful, 

and asked only their "regular hourly rate or a percentage of the 

amount actually collected, whichever was less."

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the future), and JPR would not benefit at all.13 This approach also accords with the Supreme Court's consistent rule 

that under fee-shifting statutes legal services are to be given 

their market value, irrespective of the contractual arrangements between attorney and client. See Blanchard v. Bergeron, 489 U.S. 87, 93 (1989) ("Should a fee agreement provide 

less than a reasonable fee ..., the defendant should nevertheless be required to pay the higher [market-based] 

amount."); Blum, 465 U.S. at 893-96; see also Central States, 

Southeast and Southwest Areas Pension Fund v. Central 

Cartage Co., 76 F.3d 114, 116 (7th Cir.), cert. denied, 117 S. 

Ct. 56 (1996) (citing this principle in reading section 

1132(g)(2) to permit an award of attorney's fees at market 

rates to an organization represented by salaried staff counsel); Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 

328 (5th Cir. 1995).

JPR argues that the singular purpose of section 1132(g)(2) 

is to make plans whole, and that a fee award that exceeds the 

amount actually charged by a plan's attorneys is inconsistent 

with this purpose. Making plans whole is indeed one important purpose of section 1132(g)(2). See Senate Committee 

Print, at 44 (stating that the section's intent is to "assist plans 

in recovering the costs incurred in connection with delinquencies"). But, as we have established, section 1132(g)(2) has 

other, equally important goals, which are best served by a 

__________

13 Under the collateral-source rule, "[p]ayments made to or benefits conferred on the injured party from other sources are not 

credited against the tortfeasor's liability, although they cover all or 

a part of the harm for which the tortfeasor is liable." RESTATEMENT 

(SECOND) OF TORTS § 920A (1979). This rule would seem to apply by 

analogy to in-kind donations of an attorney's services. Charitable 

contributions are ordinarily treated as a collateral source like any 

other, for precisely the reason identified by Judge Easterbrook, the 

desire to ensure that the benefit of the gift accrues to the donee, 

not to the tortfeasor. See 4 FOWLER V. HARPER ET AL, THE LAW OF 

TORTS § 25.22 at 661-63 (2d ed. 1986); see also Hudson v. Lazarus,

217 F.2d 344, 346-47 (D.C. Cir. 1954) (in a case under D.C. law, 

applying the collateral-source rule to free care received at a veterans' hospital).

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market-rate award. Furthermore, there is a real sense in 

which a market-rate award may be a peculiarly appropriate 

instrument by which to make the Funds whole. An ERISA 

plan may have only a finite pool of discounted or free legal 

assistance available to it; once this pool is used up, the plan 

will then be required to pay higher rates for legal services. 

Compelling a plan to draw on its limited stock of discounted 

legal help thus has meaningful costs to the plan, and should 

be compensable.14

We also reject JPR's argument that this case is governed 

by Eddy v. Colonial Life Ins. Co. of America, 59 F.3d 201 

(D.C. Cir. 1995). In Eddy, we interpreted a different ERISA 

fee-shifting provision, section 1132(g)(1). Under that provision, in any action under subchapter I of ERISA "by a 

participant, beneficiary, or fiduciary," a court may, "in its 

discretion," make an award of a "reasonable attorney's fee 

and costs of action to either party." 29 U.S.C. § 1132(g)(1) 

(1994). Subchapter I of ERISA can support a wide range of 

actions, including actions to enforce Plan terms or to recover 

benefits, suits for breach of fiduciary duty, actions to obtain 

information from plans, and equitable proceedings. See 29 

U.S.C. §§ 1132(a), 1132(c). Eddy concluded that the presumption applied under civil-rights fee-shifting statutes that 

successful plaintiffs should receive an attorney's fee award 

should not apply to section 1132(g)(1). JPR points to Eddy's 

observation that ERISA protects economic interests, while 

the civil rights statutes protect "dignitary as well as economic 

interests," 59 F.3d at 204, and claims that the same logic 

argues against applying SOCM to this case.

Eddy was a straightforward application of Fogerty's command to consider the purposes of a fee-shifting statute in 

__________

14 For this reason, the dissent is mistaken in suggesting that we 

are offering a "windfall" to those plans that decide to keep the 

excess of a fee award over the amount billed. Diss. op. at 2. If 

only a limited amount of discounted legal help is available to a plan, 

then drawing on that pool of legal help has an opportunity cost to 

the plan. When the pool runs out, the plan will need the supposed 

"windfall" to pay its lawyers.

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deciding whether to apply caselaw developed under another 

fee-shifting provision. See Eddy, 59 F.3d at 205 (citing 

Fogerty ). ERISA's legislative history contained no evidence 

that Congress's goals in enacting section 1132(g)(1) would 

have been furthered by establishing a presumption in favor of 

awards to successful plaintiffs. See id. (This is no surprise, 

given the smorgasbord of proceedings in which section 

1132(g)(1) may be invoked.) In the absence of legislative 

history, Eddy considered the broad purposes of ERISA; it 

cited the civil rights laws as an example of a category of 

statute that would justify a presumption in favor of an award 

of fees, and contrasted the dignitary interests protected by 

the civil rights statutes with the economic interests furthered 

by ERISA. In this case, by contrast, the legislative history 

and specific purposes of section 1132(g)(2) both point towards 

allowing market-rate fee awards. We therefore need not, as 

we did in Eddy, resort to considering the general nature of 

ERISA as a statute protecting economic interests.

2. Detecting Public-Spirited Discounts 

Having decided that the policies underlying section 

1132(g)(2) support an allowance to the Trustees of fees at 

market rates, assuming the fees actually paid were discounted for public-spirited reasons, the task remains of deciding 

whether the fees paid did in fact reflect a public-spirited 

discount by the counsel. We leave this task initially for the 

district court, with a brief discussion of the guiding principles 

of law.

We explained in Covington that the fee applicant bears the 

burden of demonstrating that a fee incorporates a publicspirited discount:

[T]he attorney must show that his or her custom of 

charging reduced rates is in fact attributable to "public 

spiritedness." Implicit in this line of inquiry is the 

assumption that the law was not written to subsidize 

attorneys who charge below-market rates because they 

cannot command anything more. And a defendant is 

free to rebut a fee claim on these terms in cases in which 

this issue is posed. We recognize that, in some cases, 

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this may be a difficult line of inquiry, for an attorney who 

cannot command market rates invariably will have a 

"custom" of charging rates below the market. This 

problem is diminished with respect to attorneys who 

charge variable rates (both at and below the market, with 

the latter attributable to public-spirited goals).

Covington, 57 F.3d at 1108. We concluded that it was within 

the district court's "sound discretion" to determine whether 

an attorney had public-spirited reasons for charging reduced 

rates. Id.

Deciding whether an attorney has a public-spirited reason 

for a representation should not be all that difficult. An 

important part of this inquiry will focus on whether the fee 

charged in fact differs significantly from the market value of 

the attorney's services. We discuss the process of deciding 

the correct market rate for an attorney's services in the next 

section of this opinion; because the district court may find it 

easier to decide the market value of an attorney's work than 

to analyze her motivations, it may be appropriate to perform 

this analysis first.

Turning to the question of the attorney's motivations, we 

emphasize that it is only necessary for the attorney to show 

that public-spiritedness was a principal reason for the discount, and not that it was the only reason. It is rare to find a 

person who has only one reason for the things she does, and 

the presence of other motivations need not vitiate an attorney's public-spiritedness. Client development and attorney 

training, for instance, are accepted corollaries of pro bono 

representation. See Esther F. Lardent, Structuring Law 

Firm Pro Bono Programs, THE LAW FIRM AND THE PUBLIC 

GOOD 59, 72 (Robert A. Katzmann ed., 1995). Nor does the 

possibility of a fee award necessarily taint an attorney's 

motives. Such an award will only be forthcoming if the 

attorney wins, and will be no more than the amount the 

attorney could have obtained for her time on the free market. 

An attorney who was principally motivated by the desire to 

make money would not rely on such awards, but would seek 

out clients who were able to pay the full market rate, so that 

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she could be assured of being paid at that rate whether she 

won or lost.

As officers of the court, attorneys will presumably not be 

inclined to misrepresent their reasons for granting a discount, 

and we assume that it will only rarely be necessary to secondguess those reasons. An affidavit from the client may also 

help to establish that the client understood that the fee it was 

being charged reflected a public-spirited discount, even if it 

may not have been expressly stated that this was the case. 

In some circumstances, however, there may be a clear explanation for a discount other than a desire to serve the public 

good (or market forces, which are taken into account in the 

market-rate inquiry). For instance, an attorney who gives a 

discount to a relative would need to make a strong showing 

that the discount was actually motivated by the public interest, and not by familial ties. We leave to the district court, in 

the first instance, the task of deciding the motivations of the 

Funds' attorneys.

3. Determining the Market Rate

As we explained in Covington, a party who avers that the 

rate charged by her attorneys incorporated a public-spirited 

discount must offer evidence as to the correct market rate for 

the attorneys' services. The party must both "offer evidence 

to demonstrate [her] attorneys' experience, skill, reputation, 

and the complexity of the case" and "produce data concerning 

the prevailing market rates in the relevant community for 

attorneys of reasonably comparable skill, experience, and 

reputation." 57 F.3d at 1108. In setting the market rate, the 

district court should consider what rate would be commensurate with the attorneys' skill and experience, and with the 

quality of the attorneys' work. To cite one of the dissent's 

examples, if a firm uses a case as a training-ground for young 

attorneys, the district court might find that the discounted 

rate charged by the firm reflected the attorneys' inexperience, and is the actual market value of the attorneys' services. 

Because the district court is most familiar with the quality of 

the attorneys' work, we will defer to its reasonable assessment of that work's market value.

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Both the Trustees and JPR submitted evidence on prevailing market rates and on the skill and experience of the 

Funds' attorneys. Because the district court did not reach 

the question of the appropriate market rate, we will not 

discuss these two factors further; Covington contains a detailed discussion of these questions. See Covington, 57 F.3d 

at 1108-10. We leave the issue of the prevailing market rate 

to the initial discretion of the district court.

C. Fees for This Appeal

Finally, the Trustees seek an award of the attorney's fees 

expended in prosecuting this appeal. As a rule, in fee 

disputes, if an award of attorney's fees is appropriate in the 

underlying litigation, such an award is also appropriate for a 

successful appeal (or defense of an appeal) of an issue relating 

to the fee award itself. This is so because, for fee-shifting 

provisions to serve their purposes (which may include, depending on the particular provision at issue, improving access 

to the courts, encouraging or discouraging certain types of 

litigation, or making litigants whole), their beneficiaries must 

be assured that they will be able to collect the fee awards that 

they are due. See American Federation of Government 

Employees v. FLRA, 994 F.2d 20, 22 (D.C. Cir. 1993) ("No 

matter what the purpose of an attorney's fee provision ... 

the availability of 'fees for fees' is essential to carrying out 

Congress's goal in including the provision in the first place."). 

This rule is fully applicable to fee awards under section 

1132(g)(2). See Building Service Local 47 Cleaning Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1404 

(6th Cir.1995) (finding that fees for successful appeals of 

attorney's fee disputes are recoverable under section 

1132(g)(2)); Operating Engineers Pension Trusts v. B & E 

Backhoe, Inc., 911 F.2d 1347, 1356 (9th Cir. 1990) (same). 

The Trustees cannot be said to be successful in their appeal 

of the attorney's fee issue, however, until they establish on 

remand that their attorneys did indeed discount their fees for 

public-spirited reasons. Cf. Hanrahan v. Hampton, 446 U.S. 

754, 758-59 (1980) (party is a "prevailing party" under section 

1988 only by virtue of success on the merits, not success in 

obtaining remand on appeal); Waterman Steamship Corp. v. 

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Maritime Subsidy Board, 901 F.2d 1119, 1122 (D.C. Cir. 

1990) (in a fee-shifting case under the Equal Access to Justice 

Act, observing that "award of EAJA fees for corrective 

efforts that yield no real-world benefit would reduce the 

normal deterrent to litigative nit-picking").15 If the Trustees 

do meet success on remand, the district court should make an 

additional award of fees reflecting those legal expenses the 

Trustees incurred in their appeal of the attorney's fees issue 

(but not that of the audit fees issue).

III. CONCLUSION

We affirm the district court's conclusion that the Trustees 

were not entitled to audit fees. The language of the Default 

and Payment Clause cited by the Trustees does not cover the 

routine audit that is at issue in this case. As to the auditor's 

services in the litigation before the district court, we affirm 

the district court's conclusion that the Trustees failed to 

provide adequate documentation of the need for this work.

We conclude, however, that the district court was mistaken 

in finding that section 1132(g)(2) necessarily limits the Trustees to recovering their actual legal fees. If the Trustees can 

establish that their attorneys charged them a discounted rate 

for public-spirited reasons, they may recover a fee award at 

the market rate, rather than at actual cost. If the district 

court finds on remand that the Trustees are entitled to an 

__________

15 Section 1132(g)(2) does provide that "in any action under this 

subchapter ... in which a judgment in favor of the plan is awarded, 

the court shall award the plan ... (D) reasonable attorney's fees 

and costs of the action...." 29 U.S.C. § 1132(g)(2). The decision 

of this court vacating and remanding the district court's ruling on 

the fees issue is denominated a "judgment," see FED. R. APP. P. 36, 

and could be said to be "in favor of the plan" in the sense that the 

Trustees have achieved the relief that they sought from this court 

on the issue they appealed. But a more natural reading of "judgment" in this context limits it to the original proceeding before the 

district court, in view of the subsequent listing of the content of the 

award, which includes "the unpaid contributions," interest, and 

liquidated damages, in addition to "attorney's fees and costs of the 

action."

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award of fees at market rates, the district court should also 

make an award of fees incurred by the Trustees in bringing 

their appeal of the attorney's fees issue.

We therefore vacate the district court's award of attorney's 

fees, and remand for proceedings consistent with this opinion.

So ordered.

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RANDOLPH, Circuit Judge, concurring in part and dissenting in part: I dissent from the portion of the majority 

opinion relating to attorney's fees. In my view, employee 

plans are not entitled to recover more than their actual cost 

of legal services.

When a plan wins its case, the court "shall award" the plan 

"reasonable attorney's fees and costs of the action, to be paid 

by the defendant," 29 U.S.C. § 1132(g)(2). It is true that 

language like this appears in 42 U.S.C. § 1988 (and countless 

other fee-shifting statutes); that Blum v. Stenson, 465 U.S. 

886 (1984), interpreted § 1988 to mean that a "reasonable" 

fee should be calculated by using the market hourly rate 

rather than the rate actually charged; and that Independent 

Federation of Flight Attendants v. Zipes, 491 U.S. 754, 758 

n.2 (1989), said that similarities in the language of fee-shifting 

statutes are a "strong" indicator of similarities in meaning. 

But Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), 

"squelched"to use the Seventh Circuit's word"[a]ny tendency to treat all attorneys' fees statutes as if they were 

insignificant variations on § 1988." Stomper v. Amalgamated 

Transit Union, Local 241, 27 F.3d 316, 318 (7th Cir. 1994). 

After Fogerty, "[d]ifferent statutes receive individual analysis," or should. Id.

As to the particular statute before us, it seems to me that a 

cost-of-service award, in combination with the other provisions in § 1132(g)(2), fully accomplishes "Congress's preeminent purpose ... to keep ERISA plans solvent," maj. op. at 

18. Victorious plans are entitled not only to reasonable 

attorney's fees and the amount of the delinquent contributions, but also to double interest on those contributions and to 

any other "legal and equitable relief ... the court deems 

appropriate." 29 U.S.C. § 1132(g)(2)(A)-(E). In the face of 

provisions furnishing ample deterrence for delinquent employers and ample compensation to victorious plans, I see no 

good reason why a plan should also be awarded more than its 

lawyers charged it. The majority thinks that unless marketbased fees are awarded, plans will be unable to hire "competent counsel." Maj. op. at 17. This strikes me as doubly 

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mistaken. For one thing it assumes that expensive counsel 

necessarily equals competent counsel, an equation not borne 

out by my experience. For another thing it contemplates 

only one kind of fee arrangementone requiring the client to 

turn over the excess to its lawyer. We apparently have that 

arrangement in this case. But in other cases the retainer 

agreement may be such that the plan, rather than its belowmarket-rate lawyer, keeps the windfall. I have no way of 

knowing which is the more common fee agreement in these 

sorts of cases and neither do the other judges on this court.

My colleagues charge the district court with the duty of 

deciding whether the lawyers in this case gave the plan a 

discount for "public-spirited reasons." This sounds like a rule 

saying that market rates will be awarded only if the lawyers 

never expected to receive market rates. A lawyer cannot be 

acting out of public spirit in a case, I suppose, if he hopes or 

expects to collect the full going rate. At least that is the 

theory. Yet once the majority's rule goes into place, every 

reasonable lawyer representing an employee benefit plan 

against an employerreasonable because the lawyer has read 

my colleagues' opinionwill hope to recover fees at the 

market rate. And that is scarcely the only difficulty. Consider the conundrum posed by lawyers who had mixed motives for taking the case at less than the market rate. 

Suppose, for instance, the law firm thought that by representing the plan at a discount, it was doing some public good; 

that besides, the case would help fill in some gaps on the 

firm's timesheets; that the case would be a useful training 

ground for a young associate or two; that taking the case 

might lead to, or help retain, full-fee paying clients; and that 

if the firm won, it would wind up getting the going rate 

anyway. I suspect that such a range of motives would 

typically be uncovered if one probed deeply enough. Then no 

one would be able to say where "public spiritedness" ended 

and self interest began, or what imaginary scale determines 

which outweighs the other. This only reinforces my belief 

that § 1132(g)(2)correctly interpretedpermits victorious 

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plans to be reimbursed for no more than their cost of legal 

services. But as between a rule awarding market rates only 

when the below-market lawyer satisfies the majority's motivational criterion, and a rule awarding market rates in every 

case, the latter is clearly the lesser evil, if for no other reason 

than it is better to clear up a mess than to create one.

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