Opinion ID: 3040025
Heading Depth: 4
Heading Rank: 2

Heading: Fees for certain “secretarial services”

Text: 16 Next, the Appellants assert that the District Court abused its discretion in awarding Hahnemann attorney’s fees for “secretarial services” at the same rate as applied to “legal services.” Appellants argue that the District Court awarded Hahnemann fees at a legal rate when counsel was only performing secretarial functions, such as typing. However, Hahnemann’s counsel testified that he does not dictate or handwrite a document and then submit it to his secretary for typing. Rather, he testified that his work is a simultaneous process where a word processor replaces dictation or handwriting. He testified that this process is faster than actually dictating a document, giving it to his secretary for typing, then reviewing and editing the typewritten document. In light of this testimony, we will not disturb the fee award based on this argument. iii. Attorney’s fees for time spent researching local rules and for travel costs incurred by Colorado counsel Third, Appellants argue that they should not have to pay Hahnemann for the time its counsel spent reviewing local rules. Hahnemann’s counsel was from Colorado. Appellants assert that had Hahnemann chosen local counsel, he would not have had to review the local rules. Upon considering this assertion, we conclude that we will not disturb the fee award based on this argument. Additionally, Appellants argue that the award to Hahnemann for its Colorado counsel’s travel and associated expenses was improper. Appellants assert that “if Hahnemann retained an equally competent local counsel, these expenses would never have been incurred.”9 Section 1132(g)(1) of 9 We note that this is the only issue Appellants raise on appeal with respect to the District Court’s award of costs. Therefore, we decline to address the issue of the award of Court costs to the extent that some of these costs might have fallen outside of 28 U.S.C. § 1920. See, e.g., Agredano v. Mut. of Omaha Cos., 75 F.3d 541, 544 (9th Cir. 1996)(holding that Section 1132(g)(1)’s “allowance for ‘costs of action’ empowers courts to 17 ERISA gives a District Court discretion to award “costs” in addition to attorney’s fees. We have stated that “under normal circumstances, a party that hires counsel from outside of the forum of the litigation may not be compensated for travel time, travel costs, or the costs of local counsel.” Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 426 F.3d 694, 710 (3d Cir. 2005). “However, where forum counsel are unwilling to represent plaintiff, such costs are compensable.” Id. In this case, there is nothing in the record to suggest that counsel from within the forum was unwilling to represent Hahnemann in this straight forward, albeit lengthy Section 1132(a)(1)(B) action. Therefore, we will vacate and remand the District Court’s award of travel and expense costs. On remand, the District Court can determine whether counsel in the forum would have been unwilling to represent Hahnemann. If so, then including these travel costs and expenses was proper. If not, then they should be stricken from the judgment. iv. The lodestar approach versus the contingency fee approach Fourth, Appellants assert that the evidence demonstrates that Hahnemann’s counsel charged Hahnemann on a contingent fee basis. Appellants assert that “the evidence in this case reflects a contingent fee agreement which would have awarded the Plaintiff’s attorney substantially less amount.” While this statement might be true, it does not provide a basis for this Court to vacate the attorney’s fee award. In City of Burlington v. Dague, 505 U.S. 557, 565-66 award only the types of ‘costs’ allowed by 28 U.S.C. § 1920, and only in the amounts allowed by section 1920 itself, by 28 U.S.C. § 1821 or by similar such provisions.”)(citation omitted); see also, Anderson v. Unum Life Ins. Co. of Am., Civ. No. 01-894, 2007 WL 604728, at -16 (M.D. Ala. Feb. 22, 2007)(noting that costs are taxable only if they are specified by statute and that costs not enumerated under 28 U.S.C. § 1920 are not allowed under Section 1132(g)(1) of ERISA)(citations omitted); Neyer, Tiseo & Hindo, Ltd. v. Russell, Civ. No. 92-2983, 1994 WL 158917, at -4 (E.D. Pa. Apr. 29, 1994). 18 (1992), the Supreme Court noted that it has “generally turned away from the contingent-fee model - which would make the fee award a percentage of the value of the relief awarded in the primary action - to the lodestar model.” This is true even though the lodestar model often results in a larger fee award. See id. at 566. Indeed, in Blanchard v. Bergeron, 489 U.S. 87 (1989), the Supreme Court reviewed an attorney fee award under 42 U.S.C. § 1988. However, in that case, the Supreme Court approved of the lodestar approach, “even though it produced a fee that substantially exceeded the amount provided in the contingent-fee agreement between plaintiff and his counsel.” City of Burlington, 505 U.S. at 566 (citing Blanchard, 489 U.S. at 96). Thus, the District Court’s application of the lodestar approach, as opposed to a contingency fee approach, was plainly appropriate. v. Attorney’s fees during the pre-litigation administrative process under ERISA Finally, Appellants assert that the District Court erred in awarding attorney’s fees to Hahnemann for those fees incurred during the pre-litigation administrative process. ERISA’s attorney’s fee provision states that, “[i]n any action under this subchapter (other than an action described in paragraph (2)) 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 question presented in this appeal, and one of first impression in this Circuit, is whether ERISA’s attorney’s fee provision limits a District Court to award only those fees incurred in formal judicial actions, or whether it also covers the fees incurred during the pre-litigation administrative process. Five Circuit Courts have considered this question, and all five have concluded that ERISA does not allow for the recovery of attorney’s fees incurred during pre-litigation administrative proceedings. See Parke v. First Reliance Standard Life Ins. Co., 368 F.3d 999, 1010-11 (8th Cir. 2004); Rego v. Westvaco Corp., 319 F.3d 140, 150 (4th Cir. 2003); Peterson v. Cont’l Cas. Co., 282 F.3d 112, 119-21 (2d Cir. 2002); Anderson v. Procter & Gamble Co., 220 F.3d 449, 452456 (6th Cir. 2000); Cann v. Carpenters’ Pension Trust Fund for N. Cal., 989 F.2d 313, 315-17 (9th Cir. 1993). For the following 19 reasons, we agree with our sister circuits, and conclude that the fees incurred during administrative proceedings prior to filing suit are unavailable under 29 U.S.C. § 1132(g)(1). As previously noted, Section 1132(g)(1) allows a District Court to award attorney’s fees and costs incurred in “any action under this subchapter.” We must determine whether Congress intended the term “action” to include administrative review proceedings related to the judicial action. “Used in a statute, the term ‘action’ traditionally connotes a formal adversarial proceeding under the jurisdiction of a court of law.” Peterson, 282 F.3d at 119 (citations omitted). While the Supreme Court has not reached the issue of whether the ERISA attorney’s fee statutory provision allows for the award of fees incurred during pre-litigation administrative proceedings, its decisions interpreting other fee statutes support our holding today. For example, the Supreme Court has construed the phrase “action or proceeding” under Title VII to provide for fee awards for administrative proceedings which are not court actions. See N.Y. Gaslight Club, Inc. v. Carey, 447 U.S. 54, 61 (1980); see also, Peterson, 282 F.3d at 121 (comparing the statutory language of Title VII as interpreted by the Supreme Court in N.Y. Gaslight Club, and noting that the ERISA attorney’s fee statutory provision does not contain the word “or proceedings”); Cann, 989 F.2d 316 (same). As noted by the Supreme Court, “Congress’ use of the broadly inclusive disjunctive phrase “action or proceeding’ indicates an intent to subject the losing party to an award of attorney’s fees and costs that includes expenses incurred for administrative proceedings.” N.Y. Gaslight Club, 447 U.S. at 61. Unlike Title VII, “the text of ERISA contains no similar reference to ‘proceedings,’ providing strong evidence that Congress did not intend ERISA to have as broad a reach as Title VII.” Peterson, 282 F.3d at 121. Hahnemann cites to Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546 (1986), to support its position that the award of pre-litigation fees was proper. In that case, the Supreme Court “held that, in interpreting a statutory provision authorizing attorneys’ fees, reference to an 20 ‘action,’ rather than an ‘action or proceeding,’ is ‘not a sufficient indication that Congress intended [the fee-shifting provision] to apply only to judicial, and not administrative, proceedings.’” Anderson, 220 F.3d at 453 (citing Del. Valley, 478 U.S. at 559). However, the Sixth, Eighth and Ninth Circuits have all distinguished Delaware Valley because the Supreme Court authorized the award of attorney’s fees “only when the administrative proceedings occurred after the litigation and where the administrative proceedings were necessary to enforce a final judgment that had been already obtained.” Parke, 368 F.3d at 1011 (citing Anderson, 220 F.3d at 453; Cann, 989 F.2d at 317). We agree with these Courts that Delaware Valley is distinguishable. Unlike the administrative proceedings in Delaware Valley, the administrative proceedings related to Hahnemann’s claim, while mandatory in its claim for benefits under ERISA, were not “necessary for enforcement of a judicial decree nor so closely connected to the resolution of the judicial action as to fall within the scope of . . . Delaware Valley.” Id. Therefore, Hahnemann’s reliance on Delaware Valley is misplaced. Finally, Hahnemann asks us to apply a “modified rule” as stated in Peterson and Seal v. John Alden Life Insurance Co., 437 F. Supp. 2d 674 (E.D. Mich. 2006). In both cases, the prevailing party was awarded attorney’s fees for the administrative review fees incurred during a court-ordered remand. See Peterson, 282 F.3d at 122; Seal, 437 F. Supp. 2d at 683-87. However, unlike Peterson and Seal, there was never a court-ordered remand for further administrative proceedings in this case. Therefore, we need not reach the issue of whether Hahnemann’s so-called “modified rule” should apply. That issue, is best left to be decided by another court. In sum, today we join our sister Circuits and hold that awarding a prevailing party attorney’s fees for pre-litigation administrative proceedings under ERISA is inappropriate. Therefore, we will vacate and remand the District Court’s attorney’s fees award so that it can be recalculated in light of this 21 opinion.10