United States District Court, E.D. New York
December 2, 2005.
TRUSTEES OF THE LOCAL 807 LABOR-MANAGEMENT HEALTH & PENSION FUNDS, Plaintiffs,
RIVER TRUCKING AND RIGGING, INC. Defendant.
The opinion of the court was delivered by: JOAN AZRACK, Chief Magistrate Judge
Plaintiffs, the trustees and fiduciaries (the "Trustees") of
Local 807 Labor-Management Health and Pension Funds (the
"Funds"), brought this action pursuant to sections 502 and 515 of
the Employee Retirement Income and Security Act of 1974, as
amended ("ERISA"), 29 U.S.C. §§ 1132(a)(3) and 1145, against
defendant, River Trucking and Rigging, Inc. ("River Trucking"),
to collect unpaid fringe benefit contributions to the Funds.
Plaintiffs also sought interest, liquidated damages, as well as
attorney's fees and costs pursuant to 29 U.S.C. § 1132(g)(2). Plaintiffs moved for summary judgment pursuant to Rule 56 of
the Federal Rules of Civil Procedure. By Order dated September
20, 2005, I granted plaintiffs' motion for summary judgment as to
defendant's liability for unpaid contributions to the Funds in
the amount of $15,048.80, plus interest, liquidated damages,
attorney's fees, and costs. Plaintiffs were ordered to submit
documentation, including all relevant provisions of the
collective bargaining agreement and any trust agreements, to
support its request for interest and liquidated damages, as well
as an affidavit to support its request for attorney's fees and
costs. Having reviewed plaintiffs' documentation, I hereby order
that plaintiffs be awarded damages in the sum of $38,944.36,
attorney's fees in the sum of $19,687.50, and costs in the sum of
$1,387.50, for a total damages award of $60,019.36.
A. Unpaid Contributions
The Funds hired Schultheis & Panettieri to conduct an audit of
defendant's payroll records for the period November 1, 1999
through September 30, 2003. (Pls.' 56.1 Stmt. ¶ 6.) The audit was
conducted on November 14, 2003 and it was determined that for the
period January 1, 2000 through December 31, 2002 defendant failed
to make all of the required contributions to the Funds on behalf
of employees Ryan Farrell, Julio Cali, and Henry Womack. (River
Trucking Payroll Audit, annexed to Pls.' Mot. for Summ. J. at
F0008-F00013.) The audit revealed that for the period January 1,
2000 through December 31, 2002 defendant's unpaid contributions
totaled $15,048.80. (Id. at F00010.) Accordingly, defendant
owes the Funds $15,048.80 for unpaid contributions. B. Interest on Unpaid Contributions
ERISA provides that "interest on unpaid contributions shall be
determined by using the rate provided under the plan, or, if
none, the rate prescribed under section 6621 of Title 26."
29 U.S.C. § 1132(g)(2). On October 8, 1996, the Trustees adopted an
interest rate of 18 percent per annum for unpaid contributions.
(See Affirmation of Charles Pergue dated Oct. 19, 2005 ("Pergue
Aff."), Ex. E.) Simple interest at 18 percent per annum divided
by 365.25 days*fn1 yields a daily interest rate of 0.04928
percent. A daily interest rate of 0.04928 percent on the
principal in arrears, $15,048.80, multiplied by the number of
days in arrears through October 31, 2005, yields a total of
$11,947.78. Accordingly, defendant owes the Funds $11,947.78 in
interest on the unpaid contributions.
C. Double Interest*fn2 or Liquidated Damages
Section 1132(g)(2)(C) provides that the court shall award "an
amount equal to the greater of (i) interest on the unpaid
contributions, or (ii) liquidated damages provided for under the
plan in an amount not in excess of 20 percent. . . ."
29 U.S.C. § 1132(g)(2)(C). Article IV, ¶ 5 of the amended Declaration of
Trust provides, "Trustees may require delinquent Employers to pay
interest, liquidated damages and other costs and expenses . . .
arising out of the collection of such Employer's delinquency to
the Fund." (Pergue Aff., Ex. D.) The trust agreement, however,
does not specifically provide a rate at which liquidated damages
are to be calculated. Plaintiffs are therefore entitled to an award of double interest pursuant to §
1132(g)(2)(C)(i). See DeVito v. Hempstead China Shop,
831 F.Supp. 1037, 1042 (E.D.N.Y. 1993) rev'd on other
grounds, 38 F.3d 651 (2d Cir. 1994). Accordingly, defendant
owes the Funds $11,947.78 in double interest on the unpaid
D. Attorney's Fees and Costs
Section 1132(g) also provides for the granting of reasonable
attorney's fees and costs in ERISA matters brought by fiduciaries
to enforce the terms of the CBA. The Second Circuit has adopted
the lodestar approach to calculating attorney fees. See
Bourgal v. Lakewood Haulage, Inc., 827 F. Supp. 126, 129
(E.D.N.Y. 1993) (citing Chambless v. Masters, Mates & Pilots
Pension Plan, 885 F.2d 1053, 1058-59 (2d Cir. 1989)). In
computing the lodestar, the court multiplies the number of hours
reasonably worked by what it deems to be a reasonable hourly
rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983);
Bourgal, 827 F. Supp. at 129. Awards for legal fees are
calculated in accordance with "the prevailing market rates in the
relevant community. . . ." Chambless, 885 F.2d at 1058 (quoting
Blum v. Stenson, 465 U.S. 886, 895 (1984)). Moreover, "the
district court must ascertain whether `the requested rates are in
line with those prevailing in the community for similar services
by lawyers of reasonably comparable skill, experience and
reputation.'" Id. at 1058-59 (quoting Blum 465 U.S. at 896 n.
11). When the lodestar has been calculated, the court considers
"subjective factors, such as the risk of the litigation, the
complexity of the issues, and the skill of the attorneys" New
York State Ass'n for Retarded Children, Inc. v. Carey,
711 F.2d 1136, 1140 (2d Cir. 1983) and should exclude hours that are
"excessive, redundant, or otherwise unnecessary." Hensley,
461 U.S. at 434. Finally, a fee applicant has the burden of establishing its hourly rate and
hours expended. See Blum, 465 U.S. at 896 n. 11.
To support plaintiffs' request for attorney's fees, plaintiffs'
counsel, Charles Pergue,*fn3 submitted contemporaneous time
records that reflect 103.25 hours of work performed during the
pendency of this action, amounting to $26,875.00. (See
Supplemental Affirmation of Charles Pergue dated Oct. 20, 2005
("Suppl. Pergue Aff."), Ex. A.) During the period July 18, 2003
through November 24, 2004, Mr. Pergue was a senior associate at
Vladeck, Waldman, Elias & Engelhard, P.C., where he represented
plaintiffs in this action. (See Pergue Aff. ¶ 3.) He was
assisted by Jaimie Dvoretzky,*fn4 a junior associate at the
firm, and paralegals. (Id. ¶ 4.) During his tenure at Vladeck,
Waldman, Elias & Engelhard, P.C., Mr. Pergue and his associates
expended a total of 37 hours on this case, consisting of 22 hours
for work performed by attorneys, billed at an hourly rate of
$250.00, and 15 hours for work performed by paralegals, billed at
an hourly rate of $100.00. (See Suppl. Pergue Aff. ¶ 4.)
In December 2004, Mr. Pergue became a member of Cary Kane LLP,
where he continued to represent plaintiffs in this action. Mr.
Pergue was assisted by Ms. Dvoretzky, who joined Cary Kane LLP as
an associate. (See Pergue Aff. ¶ 4.) During the period December
14, 2004 through October 14, 2005, Mr. Pergue and Ms. Dvoretzky
expended a total of 66.25 hours on this case, reflecting, inter alia, 7.0 hours researching and drafting
the Motion for Summary Judgment, 42.25 hours researching and
drafting the Reply to Defendant's Opposition to Plaintiffs'
Motion for Summary Judgment, and 13.0 hours drafting attorney
affidavits and compiling exhibits. (See Suppl. Pergue Aff., Ex.
Having reviewed the attorney affirmations and billing records,
I find the hourly rates of $250.00 and $300.00 for work performed
by Ms. Dvoretzky to be higher than the rates charged for
comparable legal work performed by attorneys of similar
experience in the Eastern District of New York. See generally
Private Sanitation Union Local 813, Int'l Bhd. of Teamsters v.
Gaeta-Serra Assocs., 02-CV-5526, 2005 WL 2436194, at *2
(E.D.N.Y. 2005) (firm billed $200.00 per hour for work performed
by junior associates); King v. JCS Enter., Inc.
325 F. Supp. 2d. 162, 170 (2004) (firms billed $125.00-$175.00 for work
performed by associates); Martas v. Zaros Bake Shop., Inc.,
98-CV-5895, 2002 WL 1267999, at *6 (E.D.N.Y. 2002) (firm billed
$200.00 per hour for work performed by associates). Ms. Dvoretzky
is a junior associate with approximately four years of legal
experience, yet her hourly billing rate is the same as Mr.
Pergue, a partner with thirteen years of legal experience. This
is unreasonable and not in accordance with the attorney billing
practices in this district. I will therefore apply a rate of
$200.00 per hour for legal services performed by Ms. Dvoretzky
during the pendency of this action. This hourly rate is
reasonable and in accordance with the prevailing rates for
attorneys of similar experience in this district. This adjustment
of the hourly billing rate reflects a $5,000.00 reduction in
attorney's fees, reducing the total to $21,875.00.
I also find the number of hours expended in this case to be
excessive. Of the 66.25 hours expended from December 14, 2004
through October 14, 2005, approximately 42.25 hours was spent researching and drafting plaintiffs' Reply to Defendant's
Opposition to Plaintiffs' Motion for Summary Judgment ("Reply
Brief").*fn5 Plaintiffs' Reply Brief was thirty-seven pages.
The substance of the brief, however, was only eight pages and
primarily consisted of a series of quotations from case law and
the National Master Freight Agreement (the "Agreement"). The bulk
of the brief consisted of exhibits, such as copies of relevant
provisions of the Agreement and courtesy copies of the cases
plaintiffs cited in the Reply Brief. While recognizing counsel's
wide latitude regarding the expenditure of time and allocation of
resources to a particular case, it is not without limitations. In
Hensley, the Court stated:
Counsel for the prevailing party should make a
good-faith effort to exclude from a fee request hours
that are excessive, redundant, or otherwise
unnecessary, just as a lawyer in private practice
ethically is obligated to exclude such hours from his
fee submission. "Hours that are not properly billed
to one's client also are not properly billed to one's
adversary pursuant to statutory authority."
Copeland v. Marshall, 641 F.2d 880, 891 (1980)
461 U.S. at 434. In light of counsel's expertise in ERISA
litigation, and the fact that the legal issues presented in this
case were neither novel nor complex, 42.25 hours is an
unreasonable amount of time to have spent researching and
drafting the Reply Brief.
In addition to the excessive hours expended researching and
drafting the Reply Brief, the billing records submitted by
plaintiffs' counsel also include entries for tasks performed by
attorneys but that are more appropriately performed by
paralegals. For example, an entry on March 18, 2005 indicates
that Mr. Pergue spent part of 5.0 hours compiling motion papers,
exhibits, affidavits, and scanning the documents for electronic
filing with the court. Additionally, on October 5, 2005, Ms. Dvoretzky spent part of 5.0
hours compiling exhibits. In Bourgal v. Atlas Transit Mix
Corp., No. 93-CV-0569, 1996 WL 75290 (E.D.N.Y. Feb. 7, 1996),
the court reduced the fee amount because associates and partners
spent time "proofreading, collating, faxing, copying, and serving
documents. . . ." Id. at *6.
"[W]hen there is a fee application containing excessive hours,
it is within the discretion of the district court to make an
across the board percentage reduction." LaBarbera v. J.E.T.
Resources, Inc., 01-CV-4039, 2005 WL 2898736 (E.D.N.Y. Nov. 4,
2005); see also S.E.C. v. Goren, 272 F.Supp. 2d. 202, 213
(E.D.N.Y. 2003) ("Courts have routinely reduced fees computed
under lodestar methodology by deducting a percentage from the
number of hours reasonably billed by or by deducting a lump
sum."). After reviewing the contemporaneous time records
submitted by plaintiffs' counsel and considering the nature of
the case, the work performed, and counsel's expertise, I find
that a 10 percent across-the-board fee reduction is appropriate.
This 10 percent adjustment of attorney's fees amounts to
$2,187.50, for a total reduction of $7,187.50.
Accordingly, defendant owes plaintiffs $19,687.50 for legal
fees incurred during the pendency of this action.
ERISA also allows for the recoupment of costs incurred during
the pendency of the action. 29 U.S.C. § 1132(g)(2)(D). Plaintiffs
incurred costs of $1,210.50 for the audit, $150.00 for the filing
fee, and $27.00 for service of process upon defendants. (See
Pergue Aff. ¶ 9.) I find these expenses reasonable and award them
in full. Accordingly, defendant owes plaintiffs costs in the
amount of $1,387.50. II. CONCLUSION
Accordingly, plaintiffs are awarded damages in the sum of
$38,944.36, attorney's fees in the sum of $19,687.50, and costs
in the sum of $1,387.50, for a total damages award of $60,019.36.
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