United States District Court, N.D. Illinois, Eastern Division
September 1, 2005.
JON MAGIN, Plaintiff
MONSANTO COMPANY, PHARMACIA CORPORATION and CP KELCO U.S., INC. Defendants.
The opinion of the court was delivered by: JAMES HOLDERMAN, District Judge
MEMORANDUM OPINION AND ORDER
On July 9, 2004, this court granted defendants Monsanto Company
("Monsanto"), Pharmacia Corporation ("Pharmacia"), and CP Kelco
U.S., Inc.'s ("Kelco") motions for summary judgment on plaintiff
Jon Magin's ("Magin"), claims under the Employee Retirement
Income and Security Act of 1974, 29 U.S.C. § 1001 et seq.,
("ERISA"), (Dkt. Nos. 108-10) aff'd Magin v. Monsanto Co.,
___ F.3d ___, No. 04-2997, 2005 WL 2008233 (7th Cir. Aug. 23, 2005).
On January 13, 2005, this court granted Monsanto and Pharmacia's
motion for an award of attorneys' fees and costs pursuant to
ERISA's fee shifting provision, 29 U.S.C. § 1132(g)(1), and an
assessment of sanctions against plaintiff Magin and his counsel
pursuant to 28 U.S.C. § 1927, but denied the defendants' request
for sanctions against Magin under Rule 11 of the Federal Rules of
Civil Procedure, Magin v. Monsanto Co., No. 03-1366, 2005 WL
83334 (N.D. Ill. Jan. 13, 2005). The court's January 13, 2005
order did not award a dollar amount to Monsanto and Pharmacia for
attorneys' fees and costs because the parties had failed to
comply with the requirements of Local Rule 54.3. Instead, the
court set additional dates for the parties' compliance with Local Rule 54.3 and associated briefing. On March
1, 2005, Monsanto and Pharmacia filed the pending motion for an
assessment of attorneys' fees and costs. (Dkt. No. 123). For the
reasons set forth below, Monsanto and Pharmacia's renewed motion
for attorneys' fees and costs of March 1, 2005 is granted.
On January 13, 2005, this court held that Monsanto and
Pharmacia were entitled to reasonable attorneys' fees and costs
under ERISA's fee shifting position. Magin v. Monsanto Co. No.
03-1366, 2005 WL 83334, at *3-5 (N.D. Ill. Jan. 13, 2005). This
court found that Magin had taken positions in this litigation
that were not substantially justified, not taken in good faith
and at times were objectively frivolous. Id. at *4-5. This
court concluded on January 13, 2005 that it would be
inappropriate for Monsanto and Pharmacia to bear their own
attorneys' fees and costs in this litigation. Id. at *5.
This court supported its January 13, 2005 determination that
fee shifting was appropriate in this case based on a variety of
shortcomings exhibited by Magin during the litigation. These
deficiencies included filing state law claims in a second amended
complaint after this court had previously held that Magin's state
law claims were preempted under ERISA. Id. at *4 ("Magin had
clear notice of the legal rule of ERISA preemption after this
court's ruling on the first amended complaint, yet he took a
second run at the same argument in his second amended
The court's opinion also noted that "Magin has failed to meet
court imposed deadlines and requirements at various times
throughout the litigation," Id. at *5, and he failed to provide
support for legal arguments with citation or explanation. Id.
at *4. Lastly, this court held that there were no special circumstances that mitigated against
levying an award of attorneys' fees and costs against Magin.
Id. at *5. Not only did Magin fail to provide evidence that he
would be unable to pay an award of attorneys's fee but "Monsanto
and Pharmacia argue that Magin received over $800,000 in salary
and severance payments from Monsanto in 2000 and 2001." Id. at
The court bifurcated its determination that Monsanto and
Pharmacia were entitled to an award of attorneys' fees and costs
from the determination of a reasonable dollar amount to award.
This court held that it was unable to determine a reasonable
award amount on January 13, 2005 due to the parties' failure to
comply with Local Rule 54.3. The court's January 13, 2005 opinion
ordered the parties to comply with Local Rule 54.3 and set
additional dates for briefing from the parties. The court
determines in this opinion that the $271,548.47 requested by
Monsanto and Pharmacia in attorneys' fees and costs is a
STANDARD OF REVIEW
"Determination of an [attorney's] fee award is left to the
discretion of the district court in light of its `superior
understanding of the litigation and the desirability of avoiding
frequent appellate review of what essentially are factual
matters.'" Wengryn v. Connor Sports Flooring Corp., No. 01 C
1519, 2002 WL 2022608, at *2 (N.D. Ill. Sept. 3, 2002) (quoting
Hensley v. Eckerhart, 461 U.S. 424, 437 (1983); Eddleman v.
Switchcraft, Inc., 965 F.2d 422, 424 (7th Cir. 1992)). "A
district court is within its discretion to reduce the number of
hours requested, or the hourly rate requested, as long as it
provides a reasonable, and `concise but clear explanation of its
reasons.'" Hacket v. Xerox Corp. Long-Term Disability Income
Plan, 355 F. Supp. 2d 931, 935 (N.D. Ill. 2005) (quoting Spegon
v. Catholic Bishop of Chicago, 175 F.3d 544, 551, 554-55 (7th Cir. 1999)).
Section 1132(g)(1) of ERISA states, "In any action under this
subchapter . . . by a participant, beneficiary, or fiduciary, the
court in its discretion may allow a reasonable attorney's fee and
costs of action to either party." 29 U.S.C. § 1132(g)(1). "There
is a `modest presumption' in favor of awarding fees to the
prevailing party, but that presumption may be rebutted." Senese
v. Chicago Area I.B. of T. Pension Fund, 237 F.3d 819, 826 (7th
Cir. 2001) (quoting Harris Trust & Sav. Bank v. Provident Life &
Accident Ins. Co., 57 F.3d 608, 617 (7th Cir. 1995)).
In determining whether fees and costs are appropriate, the
court may apply one of two tests: (1) the "substantially
justified" test or (2) the multi-factor test.*fn1 The
Seventh Circuit leaves it to the district court to select which
test to apply since "both tests essentially ask the same
question: `Was the losing party's position substantially
justified and taken in good faith, or was that party simply out
to harass its opponent?'" Quinn v. Blue Cross and Blue Shield
Ass'n, 161 F.3d 472, 478 (7th Cir. 1998) (quoting Hooper v.
Demco, Inc., 37 F.3d 287, 294 (7th Cir. 1994)). "Substantially
justified means something more than non-frivolous, but something
less than meritorious." Senese, 237 F.3d at 826. The substantially
justified standard developed from the underlying policy that
"ERISA's remedial purpose is to protect, rather than penalize
participants who seek to enforce their statutory rights." Stark
v. PPM America, Inc., 354 F.3d 666, 673 (7th Cir. 2004) (quoting
Senese, 237 F.3d at 826)).
This court previously determined in its January 13, 2005
memorandum opinion and order that it is proper to assess
attorneys' fees and costs against Magin under ERISA's fee
shifting provision because he took positions in this litigation
which were not substantially justified, not taken in good faith
and at times were objectively frivolous. Magin v. Monsanto Co.
No. 03-1366, 2005 WL 83334, at *3-5 (N.D. Ill. Jan. 13, 2005).
The court must now determine whether: (1) Monsanto and Pharmacia
are prevailing parties, and (2) the reasonableness of the dollar
amount they request.
A. Prevailing Party
"A plaintiff `prevails' when actual relief on the merits of its
claim materially alters the legal relationship between the
parties by modifying the defendant's behavior in a way that
directly benefits the plaintiff." Farrar v. Hobby,
506 U.S. 103, 111-12 (1992). An enforceable judgment on the merit is
sufficient to satisfy the prevailing party requirement.
Buckhannon Bd. and Care Home, Inc. v. West Virginia Dept. of
Health and Human Res., 532 U.S. 598, 603-04 (2001). Monsanto and
Pharmacia received an enforceable judgment on the merits when
this court granted their motions for summary judgment on July 9,
2004. (Dkt. Nos. 108-10). The court's summary judgment decision
has been affirmed on appeal by the Seventh Circuit. Magin v.
Monsanto Co., ___ F.3d ___, No. 04-2997, 2005 WL 2008233 (7th
Cir. Aug. 23, 2005). Monsanto and Pharmacia are prevailing
parties in this matter. B. Reasonable Attorneys' Fee Award
"Attorneys' fees are assigned a `lodestar' amount, [a figure
which is] calculated by multiplying the number of hours the
attorney reasonably expended on the litigation times a reasonable
hourly rate." Mathur v. Board of Tr. of Southern Illinois
Univ., 317 F.3d 738, 742 (7th Cir. 2003) (citing Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983); Dunning v. Simmons
Airlines, Inc., 62 F.3d 863, 872 (7th Cir. 1995)). "The party
seeking the fee award bears the burden of proving the
reasonableness of the hours worked and the hourly rates claimed."
Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 550 (7th
Cir. 1999). The initial lodestar figure may be further adjusted
by the court based on a number of factors.*fn2 Garcia v.
City of Chicago, No. 01 C 8945, 2003 WL 22175620, at *1 (N.D.
Ill. Sept. 19, 2003) (citing Hensley, 461 U.S. at 434)).
"The determination of an attorney's `reasonable hourly rate' is
to be based on the `market rate' for the services rendered. The
burden of providing the `market rate' is on the fee applicant,
however, once the attorney provides evidence establishing his
market rate, the burden shifts to the defendant to demonstrate
why a lower rate should be awarded." Spegon, 175 F.3d at 554-55
(internal citations omitted).
"`The reasonable hourly rate (or `market rate') for lodestar
purpose is `the rate that lawyers of similar ability and
experience in their community normally charge their paying
clients for the type of work in question.'" Garcia, No. 01 C
8945, 2003 WL 22175620, at *2 (quoting Harper v. City of Chicago Heights, 223 F.3d 593, 604 (7th Cir.
2000)). "Evidence of `market rate' includes rates other attorneys
in the area charge paying clients for similar work, fee awards
from prior cases, the attorney's credentials, and the attorney's
actual billing rate." Id. (citing People Who Care v. Rockford
Bd. of Educ., Sch. Dist. No. 205, 90 F.3d 1307, 1311-13 (7th
Cir. 1996)). "In addition, an attorney's affidavit alone cannot
establish . . . her market rate; however, such affidavit `in
conjunction with other evidence of the rates charged by
comparable lawyers is sufficient to satisfy the plaintiff's
burden.'" Id. (quoting Harper, 223 F.3d at 604).
Monsanto and Pharmacia "may recover only those hours that [its]
attorneys would bill in the private sector." Garcia v. City of
Chicago, No. 01 C 8945, 2003 WL 22175620, at *3 (N.D. Ill. Sept.
19, 2003) (citing Hensley, 461 U.S. at 434)). This court must
exclude "hours that are excessive, redundant, otherwise
unnecessary," Id., and a petition for fees must provide
sufficient description of the type of work performed.
Kotsilieris v. Chalmers, 966 F.2d 1181, 1187 (7th Cir. 1992).
"A court should not require any more [level of detail or
itemization in the plaintiff's billings] than the level of detail
paying clients find satisfactory." Garcia, No. 01 C 8945, 2003
WL 22175620, at *3 (N.D. Ill. Sept. 19, 2003) (citing In the
Matter of Synthroid Mktg. Litig., 264 F.3d 712, 722 (7th Cir.
C. Attorneys Fees and Non Taxable Costs Sought by Monsanto and
Monsanto and Pharmacia request an award of $271,548.47. This
amount subdivides into $249,813.00 in attorneys' fees and
$21,735.47 in non-taxable costs.
This court has reviewed the documentation provided by Monsanto
and Pharmacia and finds the hourly rate requested and hours
expended in this litigation are reasonable. The hourly rate
requested by Monsanto and Pharmacia's attorneys appear reasonable
when compared to the market rate requested by lawyers of similar skill and experience
in other attorneys' fees petitions previously reviewed by this
court. Monsanto and Pharmacia have also provided background
information on their attorneys and the rate requested is
commiserate with the attorneys' educational and professional
backgrounds. Monsanto and Pharmacia paid for these attorneys'
rates in 2003 and 2004, long before there was a petition for
attorneys' fees. The fact that a client is willing to pay these
rates bolsters the finding that these rates represent the market
rate. Monsanto and Pharmacia have also provided sufficiently
detailed billing invoices to properly demonstrate that the hours
expended figure is reasonable.
Magin argues that Monsanto and Pharmacia should be denied
attorneys fees and costs in their entirety. A portion of Magin's
arguments have already been considered and rejected by the
court's January 13, 2005 memorandum opinion and order. This court
considered the potential deterrent effect that an award of fees
may have on plaintiffs in ERISA litigation. However, an award of
fees in this case is appropriate due to this court's finding that
Magin took positions in this litigation which were at times not
substantially justified, not taken in good faith and at times
were objectively frivolous.
Magin also argues that Monsanto and Pharmacia must be denied
attorneys' fees and costs because their attorneys have a conflict
of interest. Magin, however, fails to demonstrate any conflict of
interest and he also fails to cite to any case law in support of
this proposition. Additionally, the court is skeptical of this
argument in light of the fact that Magin should have been aware
of the alleged conflict of interest for the past several years
but failed to raise it during the litigation or during the
briefing on the original attorneys' fee petition that resulted in
the court's January 13, 2005 opinion. The only issue directly raised by the parties' Rule 54.3
statement is Magin's argument that attorneys' fees and costs
should only be awarded from the date that this court granted in
part, and denied in part, Monsanto and Pharmacia's second motion
to dismiss. The court rejects this argument. A primary factor for
the imposition of attorneys' fees and costs is due to actions
taken by Magin in the litigation before the second motion to
dismiss. Additionally, a party is not given "one free bite at the
apple" to file motions that are not substantially justified, not
taken in good faith or objectively frivolous.
E. Joint Liability for Craig A. Anderson
The last issue for the court is the apportionment of liability
to Magin's attorney Craig A. Anderson. The court found on January
13, 2005 that the filing of state law claims in Magin's second
amended complaint were objectively unreasonable and frivolous.
This court held Magin's attorney, Craig A. Anderson of the law
firm of Jacobson, Bradvick and Anderson, Ltd. to be jointly and
severally liable with Magin for the costs and attorneys' fees
incurred by Monsanto and Pharmacia in responding to Magin's
second amended complaint. Magin v. Monsanto Co., No. 03-1366,
2005 WL 83334, at *5 (N.D. Ill. Jan. 13, 2005). This court
ordered Monsanto and Pharmacia to identity the costs and
attorneys' fees that they incurred in responding to the second
amended complaint. Id.
Monsanto and Pharmacia now seek to hold Craig A. Anderson
personally liable for $184,567.50 in attorneys' fees and
$19,282.31 in non-taxable costs for a total amount of
$203,849.81. This amount seems patently unreasonable to this
court and therefore is rejected.
This court sanctioned Magin's attorney Craig A. Anderson for
filing the state law claims in the second amended complaint. The
court held that Anderson was on notice that these claims were preempted under ERISA due to the court's prior ruling on the
motion to dismiss the first amended complaint. Anderson therefore
had no reason to refile claims that he knew were preempted.
The excess costs incurred by Monsanto and Pharmacia, and for
which Anderson is liable, relate to Monsanto and Pharmacia's
efforts to file a motion to dismiss for the second amended
complaint. Since the case law and law of the case was clear on
this point, the court believes that Monsanto and Pharmacia would
have incurred minimal costs defending against the state law
claims in the second amended complaint. Therefore, this court
holds Craig A. Anderson of the law firm of Jacobson, Bradvick and
Anderson, Ltd. to be jointly and severally liable with Magin for
the total of One Thousand Dollars ($1,000.00). This amount
represents the excess costs and attorneys' fees incurred by
Monsanto and Pharmacia in responding to the state law claims in
Magin's second amended complaint.
For the reasons set forth above, Monsanto and Pharmacia's
renewed motion for attorneys' fees and costs of March 1, 2005
(Dkt. No. 123) is granted. Monsanto and Pharmacia is awarded
$271,548.47 in attorneys' fees and non-taxable costs. This amount
represents fees and costs incurred by Monsanto and Pharmacia
through June 30, 2004. Craig A. Anderson of the law firm of
Jacobson, Bradvick and Anderson, Ltd. is jointly and severally
liable with defendant Magin for One Thousand Dollars ($1,000.00)
of these costs and fees.
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