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Gill v. Bausch & Lomb Supplemental Retirement Income Plan I

United States District Court, W.D. New York

April 13, 2015



MICHAEL A. TELESCA, District Judge.

I. Introduction

This action arises under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq. ("ERISA"). Daniel E. Gill, Thomas C. McDermott, and Jay T. Holmes (collectively, "Plaintiffs"), following the affirmance on appeal of this Court's grant of summary judgment in their favor, have filed a motion for attorney's fees and related expenses (Dkt #86).

II. Procedural Status

On January 29, 2009, Plaintiffs filed suit in this Court pursuant to Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), alleging that Defendants wrongfully terminated their monthly SERP I benefit payments pursuant to SERP I's change-in-control provision, by distributing lump-sum payments to Plaintiffs. On March 3, 2014, this Court granted Plaintiffs' motion for summary judgment and denied Defendants' motion for summary judgment. The Court held that in calculating Plaintiffs' damages, Defendants were entitled to a credit for the lump-sum payments already paid to Plaintiffs. The Court dismissed without prejudice Plaintiffs' previously filed motion for attorneys' fees pending the disposition of any appeal.

Defendants timely appealed to the United States Court of Appeals for the Second Circuit, which affirmed the Court's judgment. The Second Circuit construed this Court's remedy as "order[ing] reinstatement of Bausch & Lomb's monthly benefit obligation, while allowing for a one-time credit' in the amount of the (unlawful) lump-sum that Bausch & Lomb already paid." Summary Order at 4-5 (Dkt. #84). On January 7, 2015, Plaintiffs again moved reimbursement of attorney's fees and related expenses in the total amount of $730, 106.30. Bausch & Lomb Supplemental Retirement Income Plan I ("SERP I" or "the Plan"), Bausch & Lomb Incorporated ("B&L"), and the Compensation Committee of the Bausch & Lomb Board of Directors (collectively, "Defendants") have partially opposed the motion (Dkt #88). Defendants do not challenge whether Plaintiffs are entitled to an award of attorney's fees under ERISA, or the reasonableness of the amounts requested. Rather, Defendants oppose Plaintiffs' motion only with respect to their request to have this Court (1) require Defendant B&L to pay any award for attorney's fees and expenses out of its own assets rather than from the assets of SERP I; and (2) preclude Defendants from using assets held by SERP I to pay the attorney's fee award, or to hold back the attorney's fees against the balance of Plaintiffs' lump-sum payments.

The motion is now fully submitted. For the reasons discussed below, Plaintiffs' motion is granted in its entirety.

III. Discussion

ERISA gives courts the discretion to award reasonable attorney's fees. See 29 U.S.C. § 1132(g)(1)("In any action under this subchapter... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party."). As noted above, Defendants do not dispute Plaintiffs' entitlement to a reasonable attorney's fee. The sole dispute here is who should be responsible for payment of this fee.

B. SERP I, § 9

In support of their argument that B&L is the appropriate entity to pay the attorney's fee, Plaintiffs rely on Section 9 of SERP I, which provides in part that

[t]he Company [B&L] shall establish an irrevocable secular trust for each Participant for the purpose of holding assets used to provide the vested benefits required by this Plan. The assets of the secular trust shall at no time be available to creditors of the Company, even in the event of the Company's bankruptcy or insolvency....

SERP I, § 9 (Dkt # 56-4, p. 11). Plaintiffs argue that Section 9's plain language "prohibits trust assets from being used to satisfy any debts owed to creditors [of B&L], including debts owed to [P]laintiffs upon an award of attorney's fees...." Plaintiff's Memorandum ("Pls' Mem.") at 13 (Dkt #86-4). Defendants argue that if this Court were to order that the attorney's fees be paid with Plan assets, then Plaintiffs would be "creditors" of SERP I, not of B&L. Dkt #88, p. 8. However, as discussed further below, B&L properly was named as a defendant in this action, and Plaintiffs obtained a judgment against B&L and SERP I. Therefore, ...

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