Operating Engineers Health And Welfare Trust Fund For Northern California v. RSC General & Engineering, Inc. ( 2020 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 10 OPERATING ENGINEERS’ HEALTH AND WELFARE TRUST FUND FOR 11 NORTHERN CALIFORNIA, et al., No. 3:19-cv-02308-WHA 12 Plaintiffs, 13 v. ORDER GRANTING PLAINTIFFS’ MOTION FOR 14 UNITED RSC GENERAL & ATTORNEY’S FEES AND COSTS ENGINEERING, INC., a California 15 Corporation, et al., 16 Defendants. 17 18 INTRODUCTION 19 In this ERISA and Labor Management Retirements Act (“LMRA”) action, 20 plaintiffs move for attorney’s fees and costs. For the reasons below, plaintiffs’ motion is 21 GRANTED. 22 STATEMENT 23 Plaintiffs are (1) Operating Engineers Local Union No. 3 of the International Union 24 of Operating Engineers, AFL-CIO, (2) a related group of funds that constitute employee 25 benefit plans under ERISA, and (3) the Heavy and Highway Committee, a trust 26 established under the LMRA. Their complaint alleges that defendant Richard Ray 27 Spaulding, acting on behalf of defendants RSC General & Engineering, Inc. and Reyre 1 with plaintiff Operating Engineers Local Union No. 3. It further alleges that this 2 agreement required defendants to make payments to plaintiffs based on the number of 3 hours defendants’ employees worked, and to keep employee timecards documenting 4 those hours. Moreover, the agreement allegedly empowered the employee benefit plan 5 funds to appoint representatives that could audit defendants’ timecards, ensuring full 6 payment of all sums owed. Finally, the complaint alleges that after audits, the agreement 7 required defendants to reimburse plaintiffs for any costs incurred (Amd. Compl. ¶¶ 1–4, 8 11–15). 9 In December 2018, plaintiffs’ counsel sent a demand letter to defendant RSC after 10 it allegedly failed to comply with an audit request. RSC did not respond. Plaintiffs thus 11 initiated this action in April 2019 to compel compliance with the audit request and to 12 recover any unpaid costs that the audit might reveal. They filed a complaint and a first 13 amended complaint and served both, by process server, on defendants in June 2019. 14 Defendants never responded, and they also failed to appear at the initial case 15 management conference in August of that year. After defendants’ failure to appear, the 16 undersigned judge ordered an audit of defendants’ timecards and scheduled a second 17 case management conference for October. The order expressly directed that 18 “[d]efendants must appear at the [October] case management conference.” Plaintiffs 19 served a copy of that order to defendants “by email” on August 5, 2019 (Dkt. Nos. 1, 12, 20 17, 19 at 4–5). 21 After the August case management conference, plaintiffs completed the audit of 22 the timecards, apparently in cooperation with the defendants (who have yet to answer the 23 complaint or appear in this action). The audit revealed no discrepancies in payment. But 24 there remains the issue of attorney’s fees and the cost of the audit. Plaintiffs informed 25 defendants by letter that they remained responsible under the agreement for reimbursing 26 the costs of the audit, including attorney’s fees (Minser Decl. at Exh. D). Defendants 27 never responded to the letter, nor did they appear at the October case management 1 default judgment. The undersigned judge instead “directed” plaintiffs to file a motion 2 for attorney’s fees and costs, rather than a motion for default judgment (Dkt. No. 19 at 2, 3 4–5). 4 Plaintiffs now move to recover attorney’s fees and costs incurred from December 5 4, 2018, when plaintiffs’ counsel sent the initial letter demanding an audit, through 6 November 21, 2019. The motion requests $3,772.00 in attorney’s fees and $980.61 in 7 other costs, totaling $4,752.61. Defendants have not filed an opposition (Dkt. Nos. 18, 8 19 at 1–2, 5, 11). 9 ANALYSIS 10 The motion argues that plaintiffs are entitled to attorney’s fees and costs under the 11 Payroll Inspection and Payroll Inspection Collection Procedures, which have been 12 incorporated as part of the agreement. Plaintiffs read these procedures as requiring 13 defendants to reimburse them for “attorneys’ fees and audit fees” (Dkt. No. 19 at 6). 14 This order, which concerns the assignment of fees and costs and not the substance of the 15 agreement, need not turn on whether plaintiffs’ motion interprets these procedures 16 correctly. Rather, plaintiffs’ motion can be decided under Section 1132(g) of Title 29 of 17 the United States Code, which allows for the assignment of attorney’s fees and costs in 18 ERISA cases. Section 1132(g) provides that in any ERISA action other than “a 19 judgment in favor of the plan,” courts have discretion to award “a reasonable attorney’s 20 fee and costs of action to either party.” 21 Our court of appeals has held that five factors inform whether fees and costs should 22 be awarded under Section 1132(g): “(1) the degree of the opposing parties’ culpability or 23 bad faith; (2) the ability of the opposing parties to satisfy an award of fees; (3) whether 24 an award of fees against the opposing parties would deter others from acting under 25 similar circumstances; (4) whether the parties requesting fees sought to benefit all 26 participants and beneficiaries of an ERISA plan or to resolve a significant legal question 27 regarding ERISA; and (5) the relative merits of the parties’ positions.” Hummell v. S. E. 1 favor assigning costs and fees. Defendants failed to respond to plaintiffs’ letter 2 demanding an audit and then ignored both the complaint and the first amended 3 complaint. Furthermore, defendants failed to appear on two separate occasions for case 4 management conferences. The second failure violated a court order that expressly 5 mandated defendants’ appearance at the conference (Dkt. Nos. 17, 18, 19 at 11). 6 Accordingly, an award of attorney’s fees and costs can be justified on the first factor 7 alone. 8 Turning to the reasonableness of plaintiffs’ request, our court of appeals has 9 deemed the “lodestar” approach to be “the proper method for determining the amount of 10 attorney’s fees in ERISA actions.” Under this approach, “a court determines the 11 ‘lodestar’ amount by multiplying the number of hours reasonably expended on the 12 litigation by a reasonable hourly rate.” Van Gerwen v. Guarantee Mut. Life Co., 214 13 F.3d 1041, 1045 (9th Cir. 2000). A reasonable hourly rate can be established by the 14 “prevailing market rate[] in the relevant community.” Kelly v. Wengler, 822 F.3d 1085, 15 1099 (9th Cir. 2016). 16 Two attorneys and two paralegals worked on this matter for plaintiffs. The two 17 attorneys, Michele Stafford and Luz Mendoza, charged $235 and $230 per hour 18 respectively. Ms. Stafford is a shareholder and vice-president at the firm of Saltzman & 19 Johnson. She has been at the firm since 2003 and specializes in ERISA litigation 20 matters. Ms. Mendoza is an associate at Saltzman & Johnson. She joined the firm in 21 2018 and also specializes in ERISA litigation matters (Dkt. No. 19 at 5–6; Minser Decl. 22 ¶¶ 18–21). Neither attorney charges in excess of the prevailing market rate for ERISA 23 specialists in the San Francisco Bay Area. In Echague v. Metro. Life Ins. Co., Judge 24 William Orrick deemed an hourly rate of $650 for lead counsel and $250 for associates 25 to be reasonable for ERISA specialists in the Bay Area. 69 F. Supp. 3d 990, 996–97 26 (N.D. Cal. 2014). Ms. Mendoza falls below this reasonable associate rate, and Ms. 27 Stafford falls well below the reasonable lead counsel rate. Thus, both charged 1 The two paralegals, Nargis Shaghasi and Alicia Wood, both charged $135 per 2 hour. Ms. Shaghasi has been a paralegal at Saltzman & Johnson since 2018. Ms. Wood 3 has been a paralegal at the firm since 2014 (Dkt. No. 19 at 5–6; Minser Decl. ¶¶ 18–21). 4 Both charged reasonable rates. 5 Turning to the number of hours billed, plaintiffs’ motion states that the two 6 attorneys and two paralegals worked for a combined 20.5 hours between December 4, 7 2018 and November 21, 2019 on this matter. Plaintiffs support this motion with billing 8 records. According to the records, Ms. Stafford billed 1.4 hours. Ms. Mendoza billed 9 9.1 hours. Ms. Shaghasi billed 7.9 hours. Ms. Wood billed 2.1 hours (Dkt. No. 19 at 6; 10 Minser Decl. at Exh. H). Plaintiffs’ records do not suggest duplicative billing or an 11 unreasonably high number of hours spent on any one task. Thus, plaintiffs submit a 12 reasonable number of hours billed. 13 The following table summarizes plaintiffs’ requested attorney’s fees: 14 Timekeeper Number of Hours Billing Rate Total Due 15 Michele Stafford 1.4 $235.00 $329.00 16 Luz Mendoza 9.1 $230.00 $2,093.00 17 Nargis Shaghasi 7.9 $135.00 $1,066.50 18 Alicia Wood 2.1 $135.00 $283.50 19 Total 20.5 $3,772.00 20 $3,772.00 being reasonable, plaintiffs’ request for attorney’s fees is GRANTED. 21 That leaves plaintiffs’ request for litigation costs. The motion requests $980.61 for 22 the complaint filing fee, messenger services, legal research fees, and service of the 23 summons and complaint on defendants. Plaintiffs have submitted records detailing this 24 request (Dkt. No. 19 at 10; Minser Decl. at Exh. H). 25 The following table summarizes plaintiffs’ requested costs: 26 27 Date Description Amount 1 May 8, 2019 Chambers copies of $21.25 Summons, Complaint, and 3 May 30, 2019 Chambers copies of First $21.25 seen 5 May 30, 2019 Process of service of $199.37 6 Summons and Complaint 7 to RSC General & Engineering May 30, 2019 Process of Service of $199.37 Summons and Complaint 10 to Reyre Construction 11 May 30, 2019 Process of Service of $98.10 ag 12 Summons and Complaint g 13 to Richard Ray Spaulding Request to Continue Case 16 Management Conference 18 Plaintiffs’ requested costs rate as reasonable, so their motion for litigation costs of " $980.61 is also GRANTED. CONCLUSION a Plaintiffs’ motion for attorney’s fees and costs totaling $4,752.61 is GRANTED. 2 IT ISSO ORDERED. °3 Dated: June 18, 2020. 24 25 26 wit pal ALsup/ UNITED STATES DISTRICT JUDGE 28