Board of Trustees of the Hotel & Restaurant Employees Local 25 v. Madison Hotel, Inc.

43 F. Supp. 2d 8, 1999 U.S. Dist. LEXIS 16776, 1999 WL 155717
District Court, District of Columbia·Decided March 22, 1999·No. Civil Action 94-2483 SSH·Published·Cited by 9 cases

Opinion

OPINION

STANLEY S. HARRIS, District Judge.

This matter is before the Court on plaintiffs’ motion for ancillary relief, defendant’s opposition thereto, plaintiffs’ reply, and defendant’s surreply. Upon consideration of the parties’ submissions and the entire record, the Court grants in part and denies in part plaintiffs’ motion.

BACKGROUND

Plaintiffs are the boards of trustees of three multi-employer benefit plans (“the Funds”) to which defendant, pursuant to a collective bargaining agreement, is obligated to contribute. This lawsuit arose when defendant violated an agreement executed by the parties in settlement of a previously-filed suit under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the National Labor Relations Act (“NLRA”). The settlement agreement provided that plaintiffs would conduct an audit of defendant and report any delinquent contributions. Defendant was required either to pay the contributions due or to provide notice of its wish to contest the audit results within thirty days of receiving them. Defendant did not meet this deadline, and on November 18, 1994, plaintiffs filed this suit alleging violations of §§ 502(a)(3) and 515 of the ERISA, 29 U.S.C. §§ 1132(a)(3) & 1145, *10 § 301 of the NLRA, 29 U.S.C. § 185(a), and the settlement agreement.

Defendant filed a motion to dismiss or for summary judgment, contending that this Court does not have subject matter jurisdiction. The Court granted defendants’ motion but the Court of Appeals disagreed, holding that this Court has independent subject matter jurisdiction because any enforcement of the settlement agreement requires an application of ERISA law, over which the federal courts exercise exclusive and preemptive jurisdiction. See Board of Trustees of the Hotel and Restaurant Employees Local 25 v. Madison Hotel, Inc., 97 F.3d 1479, 1478-79 (D.C.Cir.1996).

On remand, plaintiffs filed a motion for partial summary judgment, arguing that defendant was liable for ancillary relief, including interest, liquidated damages, and attorney’s fees and expenses, under § 502(g)(2) of the ERISA. 1 The Court granted plaintiffs’ motion and directed the parties to file further briefing on the precise nature and amount of ancillary relief due. Those supplemental pleadings are now before the Court.

DISCUSSION

Section 502(g)(2) of the ERISA provides in relevant part:

In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan — ...
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of—
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A) [the unpaid contributions],
(D) reasonable attorney’s fees and costs of the action, to be paid by the defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of Title 26.

29 U.S.C. § 1132(g)(2). Pursuant to this section and the relevant trust agreements, plaintiffs seek $5,968.06 in interest, duplicate interest of $5,968.06 in lieu of liquidated damages, $243,876.25 in attorney’s fees, and $2,818.32 in expenses. 2 Defendant objects to this relief, the Court addresses each objection in turn.

I. Interest

Plaintiffs request interest of $5,968.06. Defendant contends that plaintiffs’ request is excessive because plaintiffs calculated the interest due from the date defendant became delinquent in its payments, rather than thirty days after defendant received plaintiffs’ audit report (the time provided by the settlement agreement). 3 The Court again rejects defendant’s suggestion that the settlement agreement limited plaintiffs’ ability to ob *11 tain all of the ancillary relief available to them under the ERISA and the trust agreements. See Madison Hotel, 97 F.3d at 1485-86. By failing to pay the delinquent contributions within the thirty-day period after it received the audit report, defendant forfeited its opportunity to trigger plaintiffs’ conditional waiver of their right to interest under the ERISA.

Moreover, the Court concludes that, under the ERISA, the date from which interest should be calculated is the date of the deficiency, not the date of the audit confirming the deficiency. See South Cent. United Food & Commercial Workers Unions v. C & G Markets, Inc. 836 F.2d 221, 225 (5th Cir.1988). This result is appropriate because defendant had full use of, and, at least theoretically, earned interest on the money, which should have been paid to the Funds as soon as the due date for contributions passed. Accordingly, the Court finds that plaintiffs are entitled to the $5,968.06 in interest requested, plus an additional $5,968.06 in lieu of liquidated damages under § 502(g)(2)(C) of the ERISA. See 29 U.S.C. § 1132(g)(2).

II. Attorney’s Fees

Plaintiffs request attorney’s fees of $243,876.25 and expenses of $2,818.32. As the fee applicants, plaintiffs bear the burden of establishing entitlement to fees, documenting the appropriate hours, and justifying the reasonableness of the rates requested. See Board of Trustees of the Hotel and Restaurant Employees Local 25 v. JPR, Inc., 136 F.3d 794, 806 (D.C.Cir.1998) (citing Covington v. District of Columbia, 57 F.3d 1101, 1107 (D.C.Cir.1995)) [hereinafter “Covington II”]; Martini v. Federal Nat’l Mortgage Ass’n, 977 F.Supp.

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Board of Trustees of the Hotel & Restaurant Employees Local 25 v. Madison Hotel, Inc., 43 F. Supp. 2d 8, 1999 U.S. Dist. LEXIS 16776, 1999 WL 155717 (D.D.C. 1999).

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