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Janowski v. International Brotherhood of Teamsters Local No. 710 Pension Fund

decided: February 9, 1987.

WILLIAM R. JANOWSKI AND ROBERT H. BARNHISEL, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-APPELLEES,
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS LOCAL NO. 710 PENSION FUND, WILLIAM D. JOYCE, JOHN D. LELAHAN, ANTHONY CURCIO, ROBERT J. BAKER, JOHN J. BARRANCO AND ROY M. PRIDE, DEFENDANTS-APPELLANTS



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 78 C 841 -- Thomas R. McMillen, Judge.

Author: Bauer

Before BAUER, Chief Judge, and CUMMINGS and POSNER, Circuit Judges.

BAUER, Chief Judge

The issue in this appeal is whether the district court properly exercised its discretion in awarding plaintiffs attorneys' fees and costs including prejudgment interest. We hold that plaintiffs are not "the prevailing parties" in this litigation and therefore reverse the district court's award of attorneys' fees and costs.

I.

This case involved a challenge by two participants of the International Brotherhood of Teamsters Local No. 710 Pension Fund ("the Fund") to five separate and distinct amendments to the Pension Plan ("the Plan") which became effective February 1, 1976, and were adopted to effect the changes required by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Two plan participants, William R. Janowski and Robert H. Barnhisel (collectively Janowski), brought suit alleging that the amendments deprived them of benefits which vested before ERISA became effective. The suit ultimately proceeded as a class action on behalf of all pre-ERISA participants of the Fund whose early retirement benefits were, or might be, affected by the amendments.

On appeal from the district court's decision on cross-motions for summary judgment and award of attorneys' fees and costs to plaintiffs' counsel, we affirmed in part and reversed in part the district court's decisions. We affirmed the attorney fee award. 673 F.2d 931 (7th Cir. 1982). Defendants petitioned the Supreme Court for a writ of certiorari to review our determinations on attorneys' fees and plaintiffs' standing to challenge one of the amendments -- the part-time service issue. The Supreme Court granted defendants' petition, vacated our decisions regarding attorneys' fees and plaintiffs' standing to challenge the part-time service issue, and remanded these issues to the district court for further consideration in light of Hensley v. Eckerhart, 461 U.S. 424, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983).

The district court granted defendants' motion for summary judgment on the part-time service issue, finding that plaintiffs lacked standing to challenge this Plan provision. The district court awarded plaintiffs' counsel attorneys' fees of $57,820.00 and costs of $805.00 enhanced by prejudgment interest. Application of the interest award increased the attorneys' fee award to $77,794.60. Defendants appeal from the district court's award of attorneys' fees and costs on the ground that no fees should have been awarded because defendants ultimately prevailed on every substantive challenge to the Plan alleged by plaintiffs. We agree.

The Fund was created in 1955 pursuant to a collective bargaining agreement. It provided for retirement, survivor, disability, and death benefits for which the employer contributed on behalf of its employees. The Plan was amended on April 21, 1976, but was retroactively effective as of February 1, 1976. After the amendments, the Plan was submitted to the IRS and approved. In January 1978, a booklet describing the revisions and reprinting the test of the new Plan was published for Plan participants. Plaintiffs brought suit challenging five separate plan amendments. These issues are fully described in our decision at 673 F.2d 931 (7th Cir. 1982). We summarize these five challenges to the Plan and note their ultimate disposition.

A. The Age 65 Issue

Plaintiffs alleged that the trustees of the Fund violated their fiduciary duties under ERISA by designating age 65 as the normal retirement age under the amended Plan. Plaintiffs argued that early retirement benefits had been unlawfully actuarily calculated, and that participants' rights to receive benefits at age 57 had been infringed in addition to losing their rights to preretirement survivor benefits. The district court granted summary judgment in favor of defendants on the age 65 issue. We affirmed and plaintiffs' petition for a writ of certiorari on this issue was denied.

B. The Accrued Benefit Issue

Plaintiffs argued that the amended Plan used the wrong formula under 29 U.S.C. § 1054(b)(1)(D) to calculate a participants' accrued benefit for pre-ERISA years of service. The district court agreed, reasoning that participants were entitled to an implied accrual of benefits rather than the old plan which had no accrued benefit formula. We rejected the concept of implied accrual of benefits because 29 U.S.C. § 1054(b)(1)(D) did not specifically provide that a formula based on required years of ...


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