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Compliance August 4, 2011
Attorneys for Cash Balance Plaintiff Get Additional Award
A federal district court approved an additional award of fees
and costs incurred by attorneys representing participants who won a cash balance plan challenge.
Reported by Rebecca Moore
Judge Melinda Harmon of the U.S. District Court for the Southern District of Texas said that because the case did not lead to an early settlement, in large part due to United Way of Texas Gulf Coast’s unyielding and vigorous defense, plaintiff’s counsel have expended a great deal of time and effort over a lengthy litigation period. Moreover, because the amount of pension benefits recovered by each participant or beneficiary here is relatively limited, the court found that equity weighs in favor of denying a common fund fee and having United Way pay the fee under the statute.
Harmon ordered a total award for fees and costs under ERISA § 502 of $277,667.06 and $1,715.33, respectively.
However, Harmon ruled that Plaintiff/Class Representative Ann W. Humphrey’s Rule 54 motion for common-fund costs and fees and additional costs and attorneys’ fees would give her a windfall since she/the class would receive the lodestar award under ERISA § 502, but would not need to use it to pay for attorneys’ fees since an award was granted to counsel. Harmon said the court finds no justification for such a double award.
In addition, the court found that the anti-alienation provision of the Employee Retirement Income Security Act would preclude Humphrey from receiving fees from that portion of a common fund comprised of undistributed and/or only potential future benefits.
Harmon also denied United Way’s Rule 59 motion to alter or amend the judgment, or alternatively motion for reconsideration, or alternatively motion for new trial, saying that altering, amending or reconsidering a judgment is an extraordinary measure that should rarely be granted and only when there is an intervening or change in controlling law; the availability of new evidence not previously available; or the need to correct a clear error of law or fact or to prevent a manifest injustice.
Harmon said the court has expended extensive time and effort in addressing the issues as they were initially presented and as they have evolved over the pendency of the action. After yet another careful review, it stands by its earlier orders.
The court previously granted summary judgment to the plaintiffs who claimed that after converting from a pension to a cash balance plan, United Way miscalculated early retirement benefits per the language of the plan, and also previously awarded attorney’s fees (see “Court Slashes Lawyers’ Fees in Cash Balance Challenge“).