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Compliance April 4, 2011
Participants Not Responsible for Employers' Legal Fees
A federal judge in Colorado rejected an employer’s request that its lawyers' fees be paid for by participants who lost their case.
Reported by Fred Schneyer
El Paso Corp. was asking for $1.5 million in litigation fees for a cash balance plan suit that was ultimately decided in the company’s favor. Senior Judge Walker D. Miller of the U.S. District Court for the District of Colorado found a good deal of legal uncertainty about cash balance plans when the original suit was filed against El Paso Corp. in 2004. That meant that there was no bad faith or culpability shown by the participants challenging the plan, the court argued. El Paso requested it be awarded attorneys’ fees for the time its attorneys spent on the Employee Retirement Income Security Act (ERISA) portion of the case and that related age-discrimination allegations were not at issue.
“[E]ven though I ultimately determined that Plaintiffs’ claims should not go forward, I cannot conclude that Plaintiffs’ assertions were so lacking in merit that they should bear the implicit sanction of an attorneys’ fee award for the Defendants,” Miller wrote.
In addition to ruling for the employer on the Employee Retirement Income Security Act (ERISA) claims, Miller also eventually tossed out age discrimination allegations (see “Court Dismisses Cash Balance ADEA Charges“).
The case is Tomlinson v. El Paso Corp., D. Colo., No. 1:04-cv-02686-WDM-CBS.