The opinion of the court was delivered by: Spatt, District Judge.
After a non-jury trial on January 26, 27 and 28, February 12
and 19, April 9 and 30, and September 17, 1999, the Court, on
March 3, 2000, held that "[t]he provisions of the applicable
ERISA statute, 29 U.S.C. § 1103(c)(1) and 1104(a)(1)(A) require
the defendants to return to Head Start the sum of $497,736, the
portion of surplus reserves segregated for and attributable to
them," L.I. Head Start Child Development Services Inc. v.
Kearse, 86 F. Supp.2d 143, 153 (E.D.N.Y. 2000).
Presently before the Court are three motions. First, the
defendants move pursuant to Rule 59 of the Federal Rules of Civil
Procedure ("Fed.R.Civ.P.") for an order granting reconsideration
of the Court's March 3, 2000 decision insofar as the defendants
claim that the Court overlooked the financial stability of CAAIG.
Second, the plaintiffs move pursuant to Fed. R.Civ.P. 59 for an
order granting reconsideration of that portion of the Court's
March 3, 2000 decision denying prejudgment interest to the
plaintiffs from September 1, 1992. Finally, the plaintiffs move
for an award of attorneys' fees and costs.
A. Standard of Review: Motion For Reconsideration
Motions for reargument are governed by Rule 6.3 (formerly Rule
3[j]) of the Local Rules of the United States Courts for the
Southern and Eastern Districts of New York. Local Rule 6.3
provides as follows:
A notice of motion for reargument shall be served
within ten (10) days after the docketing of the
court's determination of the original motion. There
shall be served with the notice of motion a
memorandum setting forth concisely the matters or
controlling decisions which counsel believes the
court has overlooked. No oral argument shall be heard
unless the court grants the motion and specifically
directs that the matter shall be reargued orally. No
affidavits shall be filed by any party unless
directed by the court.
The standard for granting a motion for reconsideration "is
strict, and reconsideration will generally be denied unless the
moving party can point to controlling decisions or data that the
court overlooked — matters, in other words, that might reasonably
be expected to alter the conclusion reached by the court."
Shrader v. CSX Transportation, Inc., 70 F.3d 255, 256-57 (2d
Cir. 1995) (citations omitted). The high burden imposed on the
moving party has been established "in order to dissuade
repetitive arguments on issues that have already been considered
fully by the Court." (Ruiz v. Commissioner of the D.O.T. of
City of New York, 687 F. Supp. 888, 890 [S.D.N.Y. 1988],
modified on other grounds, 934 F.2d 450 [2d Cir. 1991]).
Granting such a motion means that a Court must find that it
overlooked "matters or controlling decisions" which, if it had
considered such issues, "would have mandated a different result."
Durant v. Traditional Investments, Ltd., 88 CV 9048, 1990 WL
269854 (S.D.N.Y. April 25, 1990).
1. The Defendants' Motion for Reconsideration
The defendants move for reconsideration of the Court's prior
order holding that "the record does not demonstrate that a
transfer of $497,736, representing Head Start reserve funds,
would threaten the financial well being of the CAAIG Trust." The
defendants submit that the Court overlooked Defendants' Exhibit U
which demonstrated that the net assets available for benefits in
the CAAIG Fund for the year ended August 31, 1997 were $335,298.
As a result, the defendants argue that execution of the Court's
order will cause the CAAIG Fund to transfer all remaining assets
to the detriment of the remaining CAAIG Fund participants.
Another review of the Court's prior order and the record leads
the Court to the view that the defendants' motion for
reconsideration should be denied.
The defendants rely upon the Second Circuit's decision in
Ganton Technologies, Inc. v. National Industrial Group Pension
Plan, 76 F.3d 462 (2d Cir. 1996). First, it is not clear that
the rationale in the Ganton case mandates that the issue as to
whether the CAAIG Fund has the financial stability to pay the
judgment in this matter is a crucial element in this case. As
mentioned in the Court's prior order, the Ganton case involved
a pension fund rather than a health benefit fund. This
distinction was noted by the Second Circuit in Trapani v.
Consolidated Edison Employees' Mut. Aid Soc'y, Inc., 891 F.2d 48
(2d Cir. 1989). In a pension plan, the Court has the critical
policy consideration of protecting the future long range
actuarial protecting of its members. Pension fund members plan
their retirement and future financial well-being on the proceeds
of a pension. With regard to a health benefit fund, members of
the plan have only unvested future interests that may arise if
health benefits become necessary. In addition, while it would
undoubtedly pose a financial burden, remaining members of a
health benefit fund can always purchase other health insurance if
the fund becomes depleted.
Second, the Ganton case involved a pooled pension fund. Here,
by contrast, the Court has previously determined that the "CAAIG
was not a pooled fund and that each of the contributing
employer's funds were segregated." This is an important
distinction because unlike the remaining employees in Ganton,
the remaining employees of the CAAIG Fund, have no interest or
right to the L.I. Head Start reserves. In other words, unlike
Ganton, the plaintiffs in this case are only seeking the return
of their segregated contributions paid on their behalf, not
expended for benefits, and retained by the defendants for the
benefit of ...