Court Opinion

ID: 2656245
Source: CourtListenerOpinion
Date Created: 2014-03-11 17:36:20.116961+00
Date Added: 2024-06-11T12:36:29.528776
License: Public Domain

United States Court of Appeals
                       For the First Circuit

Nos. 11-1944
     11-1970

  CENTRAL PENSION FUND OF THE INTERNATIONAL UNION OF OPERATING
          ENGINEERS AND PARTICIPATING EMPLOYERS ET AL.,

               Plaintiffs, Appellants/Cross-Appellees,

                                 v.

                    RAY HALUCH GRAVEL CO. ET AL.,

               Defendants, Appellees/Cross-Appellants.

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Michael A. Ponsor, U.S. District Judge]

                               Before

                      Thompson, Selya and Dyk,*

                           Circuit Judges.

     Kenneth L. Wagner, with whom Blitman & King LLP was on brief,
for appellants/cross-appellees.
     José A. Aguiar, with whom Doherty, Wallace, Pillsbury and
Murphy, P.C. was on brief, for appellees/cross-appellants.

                           March 11, 2014

     *
      Of the Federal Circuit, sitting by designation.
              SELYA,    Circuit   Judge.     Although     parties     to   civil

litigation typically bear the burden of paying their own counsel,

see Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240,

247 (1975), statutes and contractual provisions sometimes alter

that burden.         When fee-shifting is in order, the trial judge,

having superintended the litigation, has a superior coign of

vantage — and he is expected to put his "acquired savvy . . . to

good use" in determining the amount of the award. United States v.

Metro. Dist. Comm'n, 847 F.2d 12, 15 (1st Cir. 1988).

              In this case, the plaintiffs, after a bench trial,

obtained a money judgment.         Later, the judge made a fee award that

pleased nobody.        Both sides have appealed, challenging the amount

of the award.        After careful consideration, we conclude that the

award       fell   within   the   spacious   encincture    of   the    judge's

discretion.        Accordingly, we affirm.

              We sketch the relevant background and travel of the case.

In 2009, the Central Pension Fund of the International Union of

Operating Engineers and Participating Employers, together with

various affiliates (collectively, the Fund), sued Ray Haluch Inc.

(Haluch)1 to recover unpaid employee-related remittances allegedly

due under a collective bargaining agreement (the CBA).              The Fund's

        1
       Although the Fund's complaint purported to name other
defendants including Ray Haluch Gravel Co., the record reflects
that Ray Haluch, Inc. is the only existing corporate entity among
those named.

                                      -2-
complaint included a prayer for attorneys' fees and costs pursuant

to both the CBA and the Employee Retirement Income Security Act

(ERISA), 29 U.S.C. §§ 1001-1461.

          A bench trial ensued and, on June 17, 2011, the district

judge awarded the Fund damages in the amount of $26,897.41.     See

Int'l Union of Oper'g Eng'rs, Local 98 Health & Welfare, Pension &

Annuity Funds v. Ray Haluch Gravel Co. (Haluch I), 792 F. Supp. 2d
129, 138 (D. Mass. 2011).     The judge rejected the Fund's other

claims for damages, including a claim for $156,988.54 allegedly

owed on behalf of "John Doe" employees.2   See id. at 137-38.   In a

separate and subsequent ruling, the judge awarded the Fund $18,000

in attorneys' fees, together with expenses of $16,688.15.       See

Int'l Union of Oper'g Eng'rs, Local 98 Health & Welfare, Pension &

Annuity Funds v. Ray Haluch Gravel Co. (Haluch II), 792 F. Supp. 2d
139, 143 (D. Mass. 2011).   The award represented a steep reduction

from the sum sought in the Fund's fee request.    See id.

          The Fund appealed both the merits ruling and the fee

award.   Haluch cross-appealed, asserting that the fee award was

overly generous.    We entertained both appeals; held that the

district court had committed reversible error with respect to its

formulation of damages, see Cent. Pension Fund of the Int'l Union

     2
       A major part of the Fund's case centered    on its allegation
that Haluch had employed certain unidentified      persons, whom it
termed "John Doe" employees, without paying       required employer
contributions to benefit plans. The Fund sought   to recover damages
with respect to these unpaid remittances.

                                -3-
of Oper'g Eng'rs & Part'g Emp'rs v. Ray Haluch Gravel Co. (Haluch

III), 695 F.3d 1, 7-11 (1st Cir. 2012), and therefore deferred any

consideration of the claims of error directed at the decision in

Haluch II, see id. at 11 & n.7.

            On certiorari, the Supreme Court reversed, holding that

we lacked jurisdiction to review the Haluch I damage judgment

because the Fund's notice of appeal was untimely as to that

judgment.   See Ray Haluch Gravel Co. v. Cent. Pension Fund of the

Int'l Union of Oper'g Eng'rs & Part'g Emp'rs (Haluch IV), 134 S.

Ct. 773, 783 (2014); see also Fed. R. App. P. 4(a)(1)(A).    In the

wake of the Supreme Court's remand order, we dismissed the Fund's

appeal insofar as it sought to challenge the Haluch I damage

judgment and reinstated the cross-appeals challenging the separate

judgment for fees and costs.    We now turn to the assignments of

error memorialized in these cross-appeals.

            We review the amount of an award of attorneys' fees for

abuse of discretion.    See Spooner v. EEN, Inc., 644 F.3d 62, 66

(1st Cir. 2011). This standard is highly deferential, and "we will

set aside a fee award only if it clearly appears that the trial

court ignored a factor deserving significant weight, relied upon an

improper factor, or evaluated all the proper factors (and no

improper ones), but made a serious mistake in weighing them."   Gay

Officers Action League v. Puerto Rico (GOAL), 247 F.3d 288, 292-93

                                  -4-
(1st Cir. 2001).    Within this rubric, a material error of law is

always an abuse of discretion.        See id. at 292.

            Here, the Fund's putative entitlement to attorneys' fees

rests on two independent grounds: the CBA's language, see Haluch

III, 695 F.3d at 6-7, and ERISA's fee-shifting provision, see 29

U.S.C. § 1132(g)(2)(D).     Neither party has argued that the Fund's

right to attorneys' fees under the CBA differs in any material

respect from its corresponding right under ERISA. We therefore see

no need to distinguish between these two sources of rights and, for

ease in exposition, discuss the pending appeals in terms of ERISA.

            ERISA provides in pertinent part that a district court

shall award "reasonable attorney's fees and costs" to an employee

benefit plan when the plan succeeds in securing a judgment for a

violation of 29 U.S.C. § 1145 (as the Fund did here).            29 U.S.C.

§ 1132(g)(2)(D).     This provision mirrors provisions found in a

compendium of other laws in which Congress has granted courts the

authority   to   award   reasonable    attorneys'   fees   and   costs   to

prevailing parties.      See, e.g., 29 U.S.C. § 216(b); 33 U.S.C.

§ 1365(d); 42 U.S.C. §§ 1988(b), 7604(d).           When analyzing such

agnate provisions, "we apply the vast body of jurisprudence which

has sprung up in the crowded vineyard where Congress has planted a

proliferous array of fee-shifting statutes."        Metro. Dist. Comm'n,
847 F.2d at 15; accord Indep. Fed'n of Flight Attendants v. Zipes,

491 U.S. 754, 758 n.2 (1989).

                                  -5-
            The calculation of shifted attorneys' fees generally

requires courts to follow the familiar lodestar approach.                        See

Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551-52 (2010).                    One

hallmark of this approach is flexibility. See Metro. Dist. Comm'n,
847 F.2d at 15.

            In   fashioning    the   lodestar,      the   first   step    is      to

calculate the number of hours reasonably expended by the attorneys

for   the   prevailing      party,   excluding      those    hours    that       are

"excessive, redundant, or otherwise unnecessary."                    Hensley v.

Eckerhart, 461 U.S. 424, 434 (1983).           The second step entails a

determination      of   a   reasonable     hourly     rate   or   rates      —     a

determination that is often benchmarked to the prevailing rates in

the community for lawyers of like qualifications, experience, and

competence.      See GOAL, 247 F.3d at 295.         The product of the hours

reasonably worked times the reasonable hourly rate(s) comprises the

lodestar.

            The lodestar may be further adjusted based on other

considerations. See Coutin v. Young & Rubicam P.R., Inc., 124 F.3d
331, 337 (1st Cir. 1997).       Prominent among these considerations is

the degree of a prevailing party's success.            See Hensley, 461 U.S.

at 440 (explaining that "the extent of a plaintiff's success is a

crucial factor" to be considered in tailoring the final award).

            In this case, the district court patiently pursued the

path paved by previous precedents in fashioning an award of

                                     -6-
attorneys' fees.       It identified reasonable rates for the legal and

paralegal services provided.          See Haluch II, 792 F. Supp. 2d at

140-41. It then examined the claimed hours and, based on a finding

that some hours were excessive and/or unnecessary, reduced them by

one-third across the board. See id. at 141-42. These computations

yielded a lodestar of $84,656.50.            See id. at 142.        So far, so

good: the Fund mounts no challenge to these aspects of the district

court's handiwork — at least no challenge that is sufficiently

articulated to merit appellate attention.             See United States v.

Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (holding that "issues

adverted to in a perfunctory manner . . . are deemed waived").

           Building on this foundation, the district court adjusted

the lodestar value to $18,000.              Relatedly, it ordered expense

reimbursement in the sum of $16,688.15.                   It based the steep

reduction in the lodestar value largely on two considerations.

           First, the judge observed that the damages recovered

amounted   to   only    $26,897.41    and    that,   of    this   amount,   only

$10,267.11 represented delinquent employer contributions.                    See

Haluch II, 792 F. Supp. 2d at 142.          This sum, the court noted, was

far less than the nearly $200,000 in damages that the Fund had

aspired to recover.       See id.    Moreover, the Fund had not prevailed

on the crucial claim that employer contributions were due for "John

Doe" employees. See supra note 2 and accompanying text. Thus, the

Fund's success was "limited in comparison to the scope of the

                                      -7-
litigation as a whole."   Haluch II, 792 F. Supp. 2d at 142 (quoting

Hensley, 461 U.S. at 436).    Second, the court remarked that the

initial lodestar calculation dwarfed the damage award ($26,897.41).

Id. at 142-43.

          Against this historical backdrop, we start with the

Fund's appeal.   That appeal challenges what the Fund envisions as

the paltriness of the fees. In seeking a more munificent award, it

argues that the district court was too focused on proportionality.

Its argument relies on case law rejecting a strict rule requiring

proportionality between damage awards and fee awards.    See, e.g.,

Orth v. Wis. State Emps. Union, Council 24, 546 F.3d 868, 875 (7th

Cir. 2008); UAW Local 259 Soc. Sec. Dep't v. Metro Auto Ctr., 501
F.3d 283, 292-95 (3d Cir. 2007); Bldg. Serv. Local 47 Cleaning

Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1401

(6th Cir. 1995).    In light of this case law, the Fund says, the

district court's emphasis on proportionality constitutes an abuse

of discretion.

          The cases catalogued by the Fund cannot bear the weight

that the Fund loads upon them.     These cases refuse to impose a

requirement that trial judges make fee awards proportionate to the

damages recovered. But this view is hardly controversial given the

Supreme Court's conclusion that fee awards need not be proportional

to damage awards.   See City of Riverside v. Rivera, 477 U.S. 561,

580-81 (1986) (plurality op.); see also Diaz v. Jiten Hotel Mgmt.,

                                -8-
Inc., 741 F.3d 170, ___ (1st Cir. 2013) [No. 13-1444, slip op. at

15-19] (rejecting strict proportionality rule vis-à-vis state fee-

shifting statute).

            In a lodestar case, refusing to require that fee awards

be strictly proportionate to damages awards makes eminently good

sense. We agree with Judge Posner that "[t]here are fixed costs of

litigation," so a rigid proportionality rule would allow defendants

to "inflict[] with impunity small losses on the people whom they

wrong."   Orth, 546 F.3d at 875.

            None of the cases cited by the Fund holds (or even

suggests) that a fee-setting court is forbidden, in appropriate

circumstances, from considering proportionality as one factor among

many in determining the amount of fees.          The law is to the

contrary: the City of Riverside Court explained that "[t]he amount

of damages a plaintiff recovers is certainly relevant to the amount

of attorney's fees to be awarded." 477 U.S. at 574.    Withal,

proportionality is not to be given decretory significance but,

rather, is simply one item in the constellation of factors to be

assessed.   See id.   The law of this circuit is consistent with that

admonition; it recognizes that a fee-setting court can take the

amount of damages recovered into account.     See, e.g., Coutin, 124
F.3d at 339-40; Foley v. City of Lowell, 948 F.2d 10, 19-20 (1st

Cir. 1991).

                                   -9-
                  This is not to say that, when setting fees, a judge can

scrap       the    lodestar        structure      in     favor     of     a   rigid    rule   of

proportionality.                  That    would     be     an     abuse       of   discretion:

proportionality cannot be used as the sole determinant of a

lodestar-based fee award.3                    Joyce v. Town of Dennis, 720 F.3d 12,

31 (1st Cir. 2013).

                  In    the   case       at    hand,     the    district       court   plainly

understood             that   a    proportionality             standard       should   not    be

mechanically applied.               See Haluch II, 792 F. Supp. 2d at 143.                    It

nonetheless concluded (reasonably, we think) that proportionality

was a particularly relevant factor here. See id.                              We conclude that

this use of proportionality as a factor (but not the exclusive

factor) in setting the amount of the fee award was within the

court's discretion.               This conclusion is especially compelling in a

case — like this one — that involves private parties and little

articulated public interest in the judgment.4

        3
       Judicial hostility toward the rigid use of proportionality
as the sole determinant of a lodestar-based fee award is especially
strong in contexts (such as civil rights actions) in which the
public interest vindicated by a damage award may far outstrip the
amount of dollars involved. See City of Riverside, 477 U.S. at
574-76; Díaz-Rivera v. Rivera-Rodríguez, 377 F.3d 119, 125 (1st
Cir. 2004); see also City of Riverside, 477 U.S. at 586 & n.3
(Powell, J., concurring in the judgment) (drawing contrast between
civil rights cases and private actions).
        4
       We do not mean to imply that the public lacks any interest
in private companies complying with labor law requirements.
Rather, we only intend to note what is obvious: that there is no
particular public interest in the judgment that has been returned
in this case.

                                                -10-
          This leaves the vitality of the fee award as a whole.

That award reflects an unusually large adjustment to the lodestar.

But in evaluating this adjustment, we must recall that the court

factored into the fee-shifting calculus not only the relatively

modest size of the damage award but also the huge disparity between

the amount of damages sought (nearly $200,000) and the much smaller

amount of damages actually recovered ($26,897.41). See id. at 142.

The court also considered that the Fund had been unsuccessful in

pursuing a major part of its case — its claims related to the "John

Doe" employees, see supra note 2 and accompanying text — and a fee-

setting court has broad latitude to disallow attorneys' fees with

respect to time spent on unsuccessful claims.   See, e.g., Hensley,
461 U.S. at 434-35; Coutin, 124 F.3d at 339.

          The juxtaposition of these facts showed that the Fund's

success was quite "limited in comparison to the scope of the

litigation as a whole."   Haluch II, 792 F. Supp. 2d at 142 (quoting

Hensley, 461 U.S. at 436).    Taking into account the totality of

these idiosyncratic circumstances, we cannot say that the modest

lodestar value formulated by the district court constituted an

abuse of discretion.

          We turn now to Haluch's cross-appeal, which derives from

the travel of the Fund's lawyers from Syracuse, New York to

Springfield, Massachusetts to attend court sessions.   The district

judge thought that this travel was reasonably necessary and, in

                                -11-
addition    to   the   fee    award,   ordered   reimbursed       travel-related

expenses that included mileage ($2,239.82), meals ($439.64), and

kindred charges ($1,205.61).

             Haluch impugns the district court's treatment of attorney

travel, arguing that attorney hours spent in transit were not

properly identified and were not billed at a discounted rate.

Accordingly, Haluch seeks a reduction of the fees as well as

disallowance of travel-related expenses.

             It is settled beyond hope of contradiction that "an

attorney's    travel    time    may    be   reimbursed   in   a   fee   award."

Hutchinson ex rel. Julien v. Patrick, 636 F.3d 1, 15 (1st Cir.

2011). Similarly, reasonable costs associated with attorney travel

may be reimbursed.      See Bos. & Me. Corp. v. Moore, 776 F.2d 2, 11

(1st Cir. 1985). And while travel time is frequently reimbursed at

reduced hourly rates, "there is no hard-and-fast rule" requiring

such a discount.       Hutchinson, 636 F.3d at 15.

             With respect to attorney travel, the district judge has

wide (though not limitless) discretion.             Here, the judge made an

across-the-board one-third reduction to billed hours to account for

a multitude of factors, including a motley of "excessive or

unnecessary charges."         Haluch II, 792 F. Supp. 2d at 142.           After

implementing this across-the-board cut, the judge settled upon the

lodestar.     See id.        He then arrived at the final fee award by

slashing the lodestar by more than seventy-five percent.

                                       -12-
            We readily acknowledge that the court below chose to

paint with broad strokes, treating the Fund's fee application

globally instead of going item-by-item.     But the parties have not

challenged the judge's decision to eschew an item-by-item canvass;

and the judge's two-part determination neither to single out

attorney travel for special attention nor to tinker with claimed

travel expenses goes hand in glove with his across-the-board

approach.    Seen in this light, we do not think that the district

court abused its wide discretion with respect to the treatment of

travel time and expenses.

            We need go no further. For the reasons elucidated above,

we leave the parties where we found them.    Consequently, we reject

both of the pending appeals and affirm the district court's order

awarding attorneys' fees and expenses.

Affirmed.    All parties shall bear their own costs on appeal.

                                -13-