Court Opinion

ID: 8925871
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:39:24.722402+00
Date Added: 2024-06-11T17:09:23.675874
License: Public Domain

WALLACE, Circuit Judge,
concurring:
In my opinion, the majority reaches the correct result for the wrong reason. The procedural posture of this case makes it a poor vehicle for establishing broad propositions about the remedial nature of the pension statute vis-a-vis attorney’s fees. I find a more narrow reason for deciding that the district court abused its discretion in denying attorney’s fees in its failure to consider the settlement agreement Smith reached with the trust that assumed liability but did not fix an amount for attorney’s fees.
Before addressing the majority’s analysis of the case under the Hummell test, I will comment on its questionable reliance on two authorities. First, the majority relies on Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973), for the proposition that “a prevailing ERISA employee plaintiff should ordinarily receive attorney’s fees from the defendant.” Maj. op. at 593. Hall differs from the case before us because the issue in Hall had public importance. The language of 29 U.S.C. § 401(b) indicates that the rights and interests to be vindicated in member-union litigation are those of “employees and the public generally.” (Emphasis added.) Without a major public impact, a particular dispute becomes merely “private feuding having no general significance.” Hall v. Cole, 412 U.S. at 16, 93 S.Ct. at 1951 (White, J., dissenting).
Our initial opinion, Smith v. CMTA-IAM Pension Trust, 654 F.2d 650 (9th Cir.1981), dismissed Smith’s complaint on all grounds except the one involving suspensions, remanding on this issue because the record had not been fully developed. When the parties later settled, therefore, the sole open issue was whether, interpreting the suspension provision of this particular pension plan, Smith continued to be employed “in the same trade or craft” as when the benefits commenced. See ERISA § 203(a) (3)(B)(ii), 29 U.S.C. § 1053(a)(3)(B)(ii). Because it is difficult to see the general public importance of attorney’s fees for the narrow issue presented, this case is a slim reed on which to rest broad pronouncements about the statute’s remedial reach. It seems unarguable that a judgment for Smith on the “same trade or craft” issue would have a limited impact on other participants in the pension plan.
The majority apparently finds general importance by reasoning that, like civil rights laws, ERISA must be liberally construed to further its remedial purpose. Maj. op. at 592. Such an analysis has no limitation, however. Every statutory scheme is “remedial” with respect to at least one of the groups with which it is concerned, and can thus be analogized to the civil rights laws. We need legislative history. Unfortunately, the majority offers none of any significance.
*592Second, I am concerned about the majority’s argument that section 1988 awards provide a persuasive basis for reversal. Maj. op. at 592. We recently rejected an analogy between 29 U.S.C. § 1132(g)(1) and another civil rights statute, Title VII, because the analogy impermissibly narrowed the scope of section 1132(g)(1). See Carpenters Southern California Administrative Corp. v. Russell, 726 F.2d 1410, 1415-16 (9th Cir.1984) (defendant employers may be awarded attorney’s fees under section 1132(g)(1) based on same standards as for plaintiffs). I do not see why an analogy to section 1988 is appropriate here.
I now turn to the majority’s treatment of the district court’s use of the Hummell test. Maj. op. at 592. See Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 452 (9th Cir.1980). A review of the Hummell analysis, I suggest, demonstrates the majority’s use of it is flawed. The majority outlines the Hummell factors, stating the district court did not have the remedial purposes of ERISA in mind when applying them. Maj. op. at 592. The majority fails to make clear how, given these purposes, the district court improperly applied the factors. The majority then correctly cites Carpenters Southern California Administrative Corp. v. Russell, 726 F.2d at 1416, for the proposition that “[n]o one of the Hummell factors ... is necessarily decisive, and some may not be pertinent in a given case.” The last proposition, I take it, means that sometimes one of the Hummell factors could be decisive. Indeed, it could be only one because other Hummell factors may not be “pertinent in a given case.” Id. The majority then properly points out that “[i]n considering these factors to justify a failure to award fees to Smith,” the district court said “one of the main prerequisites is that there’s bad faith.” Maj. op. at 592. Thus, the district court took the lack of bad faith to be a pertinent factor justifying its failure to award fees.
The majority reversed the district court, however, on the ground that, “although bad faith is a factor that would always justify an award, it is not required.” But this reasoning inverts the Hummell test and seems to have been developed merely for the purpose of reversal. The district court was looking at the factors to justify a failure to award attorney's fees and justified its failure on the ground that there was no bad faith; it was not seeking to justify granting an award.
The majority opinion also states that because “there was no bad faith on either side, this factor should not have been considered decisive.” But the district court never said that bad faith was the only prerequisite that would justify a failure to make an award. Moreover, the majority certainly cannot mean that a district court may not look to a lack of bad faith to justify a failure to award attorney’s fees when neither side is in bad faith. A failure to award fees can be justified on the ground that there was no bad faith if, as Russell recognizes to be possible, other factors are not “pertinent.” Nothing in the transcript suggests the district court imposed an exclusive requirement on Smith, or that the district court misapplied the test:
The award of attorney’s fees under ERISA would be inappropriate in this case, because there was ,no bad faith on either side. And one of the main prerequisites is that there’s bad faith.
An award of fees would not deter others from acting under similar circumstances.
The plaintiff, from the beginning of this lawsuit, did not seek to benefit all the participants. And the narrow legal question which was decided in the plaintiff’s favor; namely, the applicability of section 203(A) of ERISA to any suspension of benefits after April 1, 1976, is really quite insignificant; and, in any case, did not have the effect of giving the plaintiff the relief that he sought. Because the question of whether he had worked in the same trade was remanded by the Ninth Circuit.
Each party’s position had some merit, and with each.side prevailing on at least one issue.
*593The defendant prevailed on its interpretation of its plan, as well as on the state law issue.
So it does not call for attorney’s fees; and the motion is denied.
I concur with the majority’s result, however, based on a proper, more comprehensible, and narrower ground for the decision. Upon remand from this court, the parties settled. Included in the settlement agreement was the following clause:
C. The parties hereto will seek to reach an agreement concerning the payment of attorney’s fees for Don Ray Smith. In the event of a failure by the parties to reach such an agreement, Don Ray Smith or his attorney may petition the Court for said fees. Failure of the parties to reach an agreement concerning attorney’s fees shall not have any effect upon the finality of this settlement agreement.
(Emphasis added.) The parties could not agree on the payment of Smith’s attorney’s fees, and Smith moved for fees before the district court pursuant to 29 U.S.C. § 1132(g)(1), which the court denied.
Without examining anything else in the district court’s treatment of the Hummell factors, I believe we should reverse and remand for abuse of discretion in light of this settlement agreement. It is clear from the above clause that both parties expected and intended that Smith was to be paid at least some attorney’s fees. Thus, this part of the agreement, though perhaps not specifically enforceable, strongly evidences the parties’ intention. Smith secured a commitment from the trust concerning the payment of his attorney’s fees. Only the amount was left open to negotiation. By way of settlement, he thus received a portion, however small, of what he brought suit to recover, and so crossed the “statutory threshold.” Under these circumstances, I believe the district judge abused his discretion by not explicitly considering this factor as pertinent in the Hummell analysis. This is a simple, available path of decision in this case, and it is the one I would take.