Court Opinion

ID: 3065228
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:29:57.844665+00
Date Added: 2024-06-11T07:38:21.474613
License: Public Domain

FILED
                            NOT FOR PUBLICATION                              MAR 21 2013

                                                                         MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                        U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

GLENN TIBBLE; WILLIAM BAUER;                     No. 11-56628
WILLIAM IZRAL; HENRY
RUNOWIECK; FREDERICK                             D.C. No. 2:07-cv-05359-SVW-
SUHADOLC; HUGH TINMAN, Jr.; as                   AGR
representatives of a class of similarly
situated persons, and on behalf of the Plan,
                                                 MEMORANDUM *
              Plaintiffs - Appellants,

  v.

EDISON INTERNATIONAL; THE
EDISON INTERNATIONAL BENEFITS
COMMITTEE, FKA The Southern
California Edison Benefits Committee;
EDISON INTERNATIONAL TRUST
INVESTMENT COMMITTEE;
SECRETARY OF THE EDISON
INTERNATIONAL BENEFITS
COMMITTEE; SOUTHERN
CALIFORNIA EDISON’S VICE
PRESIDENT OF HUMAN RESOURCES;
MANAGER OF SOUTHERN
CALIFORNIA EDISON’S HR SERVICE
CENTER,

              Defendants - Appellees.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                    Appeal from the United States District Court
                        for the Central District of California
                    Stephen V. Wilson, District Judge, Presiding

                     Argued and Submitted November 6, 2012
                              Pasadena, California

Before: GOODWIN and O’SCANNLAIN, Circuit Judges, and ZOUHARY,
District Judge.**

      The facts of this case are known to the parties and addressed in our

contemporaneously filed opinion. Having affirmed the partial grant of summary

judgment and trial verdict, we must confront the issue of costs and attorney’s fees.

                                          I

      Beneficiaries argue on appeal that the district court erred in denying them

costs and fees under Federal Rule of Civil Procedure 54 and under the Employee

Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq.

      Rule 54(d) states that unless a federal statute or the Federal Rules of Civil

Procedure provides otherwise, “costs—other than attorney’s fees—should be

allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1). This “create[s] a

presumption for awarding costs to prevailing parties,” placing the burden on the

unsuccessful party to “show why costs should not be awarded.” Quan v. Computer

       **
             The Honorable Jack Zouhary, United States District Judge District
Judge for the Northern District of Ohio, sitting by designation.

                                          2
Scis. Corp., 623 F.3d 870, 888 (9th Cir. 2010). ERISA speaks to costs and to

attorney’s fees, stating that “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).

Explaining the interplay between Rule 54(d) and § 1132(g)(1), Quan held that the

ordinary Rule 54(d) inquiry governs whether a district court was correct to deny

costs in an ERISA case. See 623 F.3d at 888–89.

                                           II

                                           A

      We review both of these denials by the district court for an abuse of

discretion. See Plumber, Steamfitter and Shipfitter Indus. Pension Plan & Trust v.

Siemens Bldg. Techs. Inc., 228 F.3d 964, 971 (9th Cir. 2000) (ERISA); Save Our

Valley v. Sound Transit, 335 F.3d 932, 944 n.12 (9th Cir. 2003) (Rule 54(d)). The

district court’s final determination as to costs as well as attorney’s fees was the

product of three different orders. First, on December 29, 2010, analyzing only

ERISA, the court decided that because beneficiaries “had ‘some success’” in the

litigation, some award of attorney’s fees was proper. No judgment was entered at

that point. Second, the court held that Edison was the prevailing party under Rule

54(d) on April 28, 2011. Then, third, in an August 22, 2011 decision, it clarified

                                           3
its reasoning under Rule 54 and “reconsidered its exercise of discretion in

awarding fees” to beneficiaries.

                                          B

      We discern no abuse of discretion in the court’s ultimate resolution: neither

party would receive any award.

                                          1

      Although not citing Hummell in reversing course on ERISA fees, the court’s

reference to its December 29 Order makes plain that it did, in fact, apply the

correct legal standard. Hummell requires courts to consider:

      (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 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.

Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980). “[N]o single

Hummell factor is necessarily decisive.” Simonia v. Glendale Nissan/Infiniti

Disability Plan, 608 F.3d 1118, 1122 (9th Cir. 2010). Initially the court, quite

reasonably, found that factors (1), (3), and (5) favored Edison: the imprudence was

an innocent mistake; deterrence would not be significant; and the defendants’

overall position in the litigation had been comparatively much stronger.

                                          4
Beneficiaries were thought at the time entitled to a “limited award,” because under

factor (2) Edison could pay and because, while not pathbreaking, the litigation

had—in terms of factor (4)— “indirectly and marginally benefitted a large class of

participants.”

      In later deciding fees were inappropriate, the court explained that its new

decision was based on “Plaintiffs’ tactic of submitting aggressive discovery

requests and asserting numerous non-meritorious claims.” It had serious concerns

about granting fees when beneficiaries pursue “a shotgun approach,” because this

would incentivize this style of litigating in the future. Edison is correct that this

finding further advantages it on factor (1), concerning the relative culpability of the

parties. In other words, once the district court determined that not only had Edison

been acting in good faith, but beneficiaries had litigated in bad faith, it

reconsidered its overall weighing of the factors. Simply put, a weak legal victory

and Edison’s ability to pay were perceived as insufficient bases—under the totality

of five factors—to justify an award of fees.

      This falls within the realm of reasonable decision making. Winning on a

single claim is no guarantee of fees under ERISA. See, e.g., Cal. Ironworkers

Field Pension Trust v. Loomis Sayles & Co., 259 F.3d 1036, 1048 (9th Cir. 2001)

(affirming district court’s decision to withhold fees when plaintiff prevailed on an

                                            5
imprudent investment claim, but defendants successfully defended against the bulk

of plaintiffs’ allegations).

       Finally, the court did recall ERISA’s remedial purpose. It simply found that

“special circumstances . . . render[ed] such an award unjust.” Honolulu Joint

Apprenticeship & Training Comm. of United Ass’n Local Union No. 675 v. Foster,

332 F.3d 1234, 1239 (9th Cir. 2003).

                                          2

       As for Rule 54, we need not decide whether the court was correct to consider

Edison the prevailing party because its analysis of the equitable factors for denying

costs adequately justify a denial, even if the burden of proof were reversed.

       Proper grounds for denying costs include (1) a losing party’s limited
       financial resources; (2) misconduct by the prevailing party; and (3) the
       chilling effect of imposing . . . high costs on future civil rights
       litigants, as well as (4) whether the issues in the case were close and
       difficult; (5) whether the prevailing party’s recovery was nominal or
       partial; (6) whether the losing party litigated in good faith; and (7)
       whether the case presented a landmark issue of national importance.

Quan, 623 F.3d at 888–89 (internal quotation marks omitted). Noting that its

analysis of the Hummell factors was instructive, the court found factors (2), (4), (5)

and (7) hurt beneficiaries’ cause. This was not an abuse of discretion.

       AFFIRMED.

                                          6