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Pierce v. Visteon Corporation

United States District Court, S.D. Indiana, Indianapolis Division

March 11, 2014

DARRYL and SHARON PIERCE On Behalf Of Themselves And All Others Similarly Situated, Plaintiffs,
v.
VISTEON CORPORATION, and VISTEON SYSTEMS, LLC, Defendants.

ORDER ON ATTORNEY'S FEES & COSTS

LARRY J. McKINNEY, District Judge.

On June 25, 2013, this Court entered its Findings of Fact and Conclusions of Law after a Bench Trial by written submissions on Plaintiffs Darryl and Sharon Pierce's (collectively, "Plaintiffs'"), on behalf of themselves and all other similarly situated (all plaintiffs, collectively, the "Class"), claims against Defendants Visteon Corporation and Visteon Systems, LLC (collectively, "Visteon"), under the Consolidated Omnibus Reconciliation Act ("COBRA"), 29 U.S.C. § 1132(c), which is part of the Employee Retirement Income Security Act ("ERISA"). Dkt. No. 300. Therein, the Court awarded each member of the class $2, 500.00 in statutory damages, or a total of $1, 852, 500.00 to be shared equally amongst the Class members; and their reasonable attorney's fees pursuant to 29 U.S.C. § 1132(g). Id. at 43-46.

Pursuant to the Court's directive, on July 23, 2013, Plaintiffs' filed their Motion for Award of Statutory Attorney's Fees and Costs to the Class and Motion for Attorney's Fees and Costs to Class Counsel ("Attorney's Fees Motion"). Dkt. No. 309. Plaintiffs argued that they should be awarded statutory attorney's fees under a lodestar calculation in the total amount of $297, 175.00 and costs in the amount of $11, 400.36. Dkt. No. 311, at 1. In addition, Class Counsel requested "reasonable compensation pursuant to the common fund doctrine in the amount of one-third (33 1/3%) of this suit's common fund, $617, 500.00, excluding whatever amount the Court may award to the Class as statutory attorney's fees and costs and costs in the amount of $11, 400.36." Id. at 1-2. Visteon objected to the number of hours expended by Class Counsel and to the Plaintiffs' proof regarding the reasonable rate for paralegals in Class Counsel's firm ("paralegal rate issue"). Dkt. No. 315. In addition, Visteon provided commentary on equitable considerations regarding Class Counsel's request for compensation under the common fund doctrine. Id. Apparently based on the paralegal rate issue, Plaintiffs' filed a Motion for Discovery seeking to obtain Visteon's counsel's paralegal rates. Dkt. No. 319. In their Reply, Plaintiffs requested an additional amount in attorney's fees and costs that were incurred after the Attorney's Fees Motion was filed, which made the total request for statutory attorney's fees and costs of $304, 027.50 in attorney's fees and $11, 444.97 in costs; Plaintiffs' Counsel's request for one-third of the common fund remained unchanged, although his request for costs was updated. Dkt. No. 317 at 1-2.

On or about December 23, 2013, the Class was provided notice of both the Court's decision regarding statutory damages and the Attorney's Fees Motion, and provided an opportunity to respond and/or object. Dkt. Nos. 333, 328, 312-1. One Class member, Kimberly Davidson ("Davidson"), mailed a response to the Court; Class Counsel reported no other responses. Dkt. Nos. 332 & 333. For the reasons stated herein, the Court finds as follows.

I. FACTUAL BACKGROUND

On September 6, 2005, Plaintiffs filed this suit as a putative class action alleging that Visteon had violated the COBRA provisions of the ERISA, when it failed to provide timely notice of the putative class members' COBRA rights. Dkt. No. 1, at 4-5. By Orders dated September 14, 2006, and October 4, 2007, the Court certified the Class pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure. Dkt. Nos. 67, 116. Notice was sent to the Class between October 19, 2007, and October 31, 2007. Dkt. Nos. 107, 119.

On May 27, 2009, Visteon filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-1330, in the United States Bankruptcy Court for the District of Delaware ("Bankruptcy Action"). Dkt. No. 217. This case was stayed pending resolution of the Bankruptcy Action. Dkt. No. 218.

In the Bankruptcy Action, on February 8, 2011, a hearing was held on Visteon's motion to lift the plan injunction to allow resolution of Plaintiffs' claims in this Court. Dkt. No. 315-2. The transcript of the hearing reflects that Visteon's bankruptcy counsel believed that Plaintiffs' objected to Visteon's motion; however, Plaintiffs' Counsel made no objection on the record. Id. at 20-21. Plaintiffs' Counsel attests that he did prepare an objection and sent it to the Bankruptcy Court and that he appeared at the hearing telephonically. Dkt. No. 317-1, ¶¶ 10 & 11. There is no evidence in the Bankruptcy Court's record that Plaintiffs' Counsel filed a formal objection or appeared at the hearing. Id. at 20; Dkt. Nos. 315-3 (Hearing Sign-In Sheet); 318-2 (Bankruptcy Action Docket Sheet). The Bankruptcy Court granted Visteon's motion.

On February 15, 2011, Visteon filed a Motion to Lift the Stay of Proceedings in light of the Bankruptcy Court's Order Lifting the Plan Injunction to Permit the District Court to Adjudicate (1) the Claim of Darryl and Sharon Pierce and All Others Similarly Situated (No. 2796) and (2) the Claim of Edward Shedlock and All Other Similarly Situated (No. 2800).[1] Dkt. No. 221. This Court granted Visteon's motion and ordered the stay lifted on March 2, 2011. Dkt. No. 222. At that time, several motions were pending, including Visteon's Motion for Partial Summary Judgment, and the Court was not inclined to enter a scheduling order until the motions had been ruled upon. Dkt. No. 223.

On December 30, 2011, the Court granted in part and denied in part Visteon's Motion for Partial Summary Judgment. Thereafter, although neither party had made any request to resolve the remaining issues, the Court held a Status Conference on September 11, 2012, to discuss outstanding discovery issues and to set a trial date. Dkt. No. 231. Thereafter, the Court set a briefing schedule on an evidentiary matter and a trial date. Id.

On February 22, 2013, the Court resolved additional discovery issues with the parties and confirmed the date and time for the Final Pretrial Conference. Dkt. No. 244. At the Final Pretrial Conference, the parties confirmed, based on their Joint Proposed Briefing Schedule, that they would submit the remaining issues to the Court by brief. Dkt. No. 246.

As previously stated, on June 25, 2013, the Court issued its Findings of Fact and Conclusions of Law After BenchTrial. Dkt. No. 300. On the merits, the Court found that: (1) the Class was comprised of 741 individuals, id. at 36; (2) there was "ample evidence in the record that Visteon was grossly negligent or willfully ignored the COBRA notice provisions of ERISA prior to 2007 and that such disregard caused harm to its former employees who were entitled to notice, " id. at 36-42;" (3) in weighing the relevant factors, the Class was entitled to a statutory penalty in the total sum of $1, 852, 500.00, which equates to $2, 500.00 per Class member, id. at 43-45; and (4) under any test enunciated by the Seventh Circuit Court of Appeals, the Class was entitled to an award of reasonable attorney's fees pursuant to the ERISA fee-shifting statute, id. at 45-46.

On or about December 23, 2013, the Class was provided notice of the Court's decision and provided a copy of the Attorney's Fee Motion. Dkt. No. 309. On January 21, 2014, the Court received Davidson's letter in response to the Notice. Dkt. No. 332. Therein, Davidson states, among other things, "Since the court system found that Visteon was negligent in their actions then I don't see why the people should have to pay their own attorneys." Id. In addition, she writes, "I don't think it is fair to make the people pay for their own attorney fees. The amount that was awarded for the people is because they were hurt by Visteon and deserve their fair share of the total amount awarded for damages." Id. But, Davidson concluded, "Bottom line is Visteon should be forced to pay for their own attorney fees since they did not abide by the laws set by our great state." Id. The Court has construed Davidson's letter as an objection to application of the common fund doctrine in this case.

II. DISCUSSION

A. PLAINTIFFS' FEE PETITION & VISTEON'S OBJECTIONS

As set forth above, the Court concluded that the Class is entitled to its reasonable attorney's fees. Dkt. No. 300, at 45-46. Pursuant to 29 U.S.C. § 1132(g), "the [C]ourt, in its discretion may allow a reasonable attorney's fee and costs of action to either party."[2] This is a fee-shifting statute in derogation of common law, which, generally, was "enacted for the purpose of encouraging the private prosecution of certain favored actions, by requiring defendants who have violated plaintiffs' rights to compensate plaintiffs for the costs they incurred to enforce those rights." Florin v. Nationsbank of Ga., N.A., 34 F.3d 560, 562-63 (7th Cir. 1994) (citations omitted). There is no argument that, when appropriate, an award of attorney's fees under this section is calculated using the lodestar method, which entails multiplying the "number of hours reasonably expended in the litigation... by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). See also Dkt. Nos. 311, at 4-5; 315, at 2-4. Adjustments may be made for "excessive, redundant, or otherwise unnecessary" hours, Hensley , 461 U.S. at 434. Or, adjustments may be made if special circumstances exist as measured by several factors: the time and labor required; the novelty and difficulty of the question; the skill requisite to perform the legal service properly; the preclusion of employment by the attorney due to acceptance of the case; the customary fee; time limitations imposed by the client or circumstances; the amount involved and the results obtained; the experience, reputation, and ability of the attorneys; the undesirability of the case; the nature and length of the professional relationship with the client; and awards in similar cases. Id. at 430 n.3.

1. U>Reasonably Hourly Rates

Plaintiffs argue that the following are reasonable rates for the various members of Class Counsel's firm:[3]

Ronald Weldy Class Counsel $325.00 per hour Mark Drummond Sr. Associate $250.00 per hour Hannah Thompson Associate $200.00 per hour Matthew Derringer Associate $200.00 per hour Cathy A. Evans Paralegal $125.00 per hour Amanda Imel Paralegal $125.00 per hour Melissa Rusler Paralegal $125.00 per hour Kristeen Mills Paralegal $125.00 per hour Melinda Wiggins Paralegal $125.00 per hour Kay Redmond Paralegal $125.00 per hour Janeen Weldy Paralegal $125.00 per hour Logan Morris Paralegal $125.00 per hour Katie Geiger Paralegal $125.00 per hour

With respect to Class Counsel's rate of $325.00 per hour, Visteon does not dispute either that the rate is reasonable or that the current rate should be used as the multiplier even though this case has been pending for nearly nine years.[4] Further, in support of Class Counsel's rate, Plaintiffs' provided: (1) Class Counsel's own affidavit that his current hourly rate is $325.00 per hour and that the same rate was recently approved in another matter pending in the Southern District of Indiana styled McLayea v. Doc G. Keys, Jr., Cause No. 1:11-cv-01453-SEB-DML (" McLayea Matter "), Docket No. 20 (Apr. 19, 2013); (2) a declaration from Philip J. Gibbons, Jr., a labor and employment law attorney who has been practicing since 1996, who attested that his current hourly rate is $330.00 per hour; and (3) a verified petition for attorney's fees in the cause styled Christian v. American Senior Communities, LLC, Cause No. 49D11-0810-PL-047706, in the Marion County Superior Court, by Baker & Daniels LLP, attorney Craig M. Borowski, a case in which Class Counsel was opposing counsel and Mr. Borowski's hourly rate was $360.00 per hour. See Dkt. Nos. 309-2, 309-1 & 309-3, respectively.

The Court concludes that Plaintiffs have adequately supported their claim that Class Counsel's $325.00 hourly rate is reasonable. In addition, the Court concludes that using the current billing rate for the entirety of the time-span of this litigation is fair compensation for the nine-year delay in this litigation, some of which is attributable to Visteon's bankruptcy, a situation completely out of Plaintiffs' or Class Counsel's control. See Missouri v. Jenkins, 491 U.S. 274, 284 (1989); Skelton v. Gen'l ...


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