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STARK v. PPM AMERICA

May 21, 2003

F. JOHN STARK, III, PLAINTIFF,
v.
PPM AMERICA, INC., PPM HOLDINGS, INC., AND THE AMENDED AND RESTATED PPM HOLDINGS, INC. CHANGE OF CONTROL SEVERANCE PLAN, PLAN NO 503, DEFENDANTS.



The opinion of the court was delivered by: William J. Hibbler, District Judge

MEMORANDUM OPINION AND ORDER

On September 23, 2002, this Court entered summary judgment in favor of defendants on, inter alia, plaintiff's claim for benefits under a Change of Control Severance Plan governed by ERISA (Plan). On January 24, 2003, the Court awarded defendants attorney's fee and nontaxable costs pursuant ERISA's discretionary fee-shifting provision, 29 U.S.C. § 1132(g)(1) (Jan. 24th Order). Now before the Court is defendants' petition for attorney's fees and non-taxable costs and plaintiff's objections. For the following reasons, defendants are awarded $261,529.00 in attorney's fees and $0 in non-taxable costs.

I. BACKGROUND

Defendants were represented in this action by two law firms — Morgan, Lewis & Bockius LLP (Morgan Lewis) and Winston & Strawn. The Philadelphia-based Morgan Lewis assumed the primary defense and the Chicago-based Winston & Strawn acted as local counsel. Defendants' petition includes over 80 pages of dated billing entries totaling $415,508 in legal fees from Morgan Lewis and $77,962.50 from Winston & Strawn. Defendants also request $71,168.59 in non-taxable costs.

Defendants attach the affidavits of Michael Banks of Morgan Lewis and Rex Sessions of Winston & Strawn in support of their petition. Mr. Banks's affidavit alleges that he acted as lead counsel and charged hourly rates of $395, $425, $450. The affidavit also states that Morgan Lewis staffed the case with associates, paralegals, and occasionally consulted a corporate partner. Mr. Sessions's affidavit alleges that he billed defendants at hourly rates ranging from $400 to $435. The affidavit also states that Winston & Strawn utilized an associate with hourly rates ranging from $185 to $220.

Plaintiff raises a number of objections to defendants' submissions. Plaintiff first argues that defendants' award must be limited to the fees accrued between the time plaintiff commenced the action and the date plaintiff identified a Change in Control event under the Plan. Plaintiff also claims that the total amount of fees requested is excessive, unreasonable, and the result of duplicative efforts by defendants' attorneys. Plaintiff further argues that defendants' petition does not discriminate between successful and unsuccessful claims and defendants can only recover fees relating to those claims upon which they prevailed.

Defendants respond that plaintiff's temporal limitation on their fee recovery is arbitrary, inaccurate, and contrary to the Jan. 24th Order. Defendants also claim that the requested fees and costs are reasonable and are less than what plaintiff paid his own attorneys. Defendants further dispute that plaintiff prevailed on any claims that would necessitate parsing the fee award.

II. DISCUSSION

A. Attorney's Fees

A determination of attorney's fees requires calculation of the "lodestar." Mathur v. Board of Trustees of Southern Illinois University, 317 F.3d 738, 742 (7th Cir. 2003). The lodestar is the product of an attorney's reasonable hourly rate and the number of hours reasonably expended. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The Court must exclude from this calculation hours that were not "reasonably expended" on the litigation. Id. Hours are not reasonably expended if they are excessive, redundant, or otherwise unnecessary. Id. Further, the Court can reduce the hours claimed by the number of hours spent litigating claims on which the party did not succeed and that were distinct in all respects from claims on which the party did succeed. Id. at 434-435; Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 550 (7th Cir. 1999). After determining the number of hours reasonably expended, the Court must examine whether the requested hourly rate is reasonable. Hensley, 461 U.S. at 433. The Court then multiplies that rate by the reasonable hours expended to obtain the lodestar. The party seeking the fee award bears the burden of proving the reasonableness of the hours worked and the hourly rates claimed. Id.

1. Lodestar

Before calculating the lodestar, the Court must address plaintiff's contention that any award be limited to the period of time plaintiff originally commenced this action (March 2, 2001) and the date plaintiff first identified the alleged Change of Control event under the Plan (May 15, 2001). Plaintiff contends that the Court's decision to award fees was based on his original complaint's failure to identify the actual transaction that effected a Change of Control and that he remedied this offense as early as May 15, 2001 when he apprized defendants' general counsel, Laurie Seegers, of the relevant Change of Control event under which he was proceeding. Plaintiff therefore believes that defendants should not recoup fees for work performed after he revealed the necessary facts to substantiate his claims.

Plaintiff's argument is unconvincing and contrary to the Court's Jan. 24th Order. The Court found that plaintiff's entire lawsuit was brought in bad faith and that the harm wrought by plaintiff's baseless complaint continued well into the litigation. See Jan. 24th Order at 4-5. The Court's fee award was based on the fact that plaintiff's ultimate legal position — not just his initial offending pleadings — was not substantially justified. Accordingly, defendants are entitled to fees incurred throughout the litigation.

a. Number of Hours

Plaintiff argues that even a "cursory" review of defendants' submissions reveal "numerous questionable entries and expenditures." Plaintiff then offers a number of general objections that purport to "raise serious concerns about the validity of Defendants' Petition." Plaintiff takes issue with entries relating to: 1) time spent drafting status reports and estimates of attorneys' fees and costs; 2) time spent addressing insurance coverage issues for the client; 3) time spent negotiating with outside vendors; 4) time spent on compensation questions; 5) costs associated with travel time to Chicago; 6) time spent by Winston and Strawn in excess of their role as local counsel; and 7) time spent after the Court's September 2001 decision. Plaintiff does not direct the Court to any objectionable time entries or dates. Plaintiff also fails to substantiate his objections with citations to any relevant authority. ...


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