Glenn Tibble v. Edison International

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NOT FOR PUBLICATION MAR 21 2013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
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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.
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