Toussaint v. Mahoney

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09-3797-cv
Toussaint v. Mahoney
UNITED STATES COURT OF APPEALS 1
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F OR THE S ECOND C IRCUIT 3
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5
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August Term, 2010 7
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(Argued: May 3, 2011 Decided: June 6, 2011) 9
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Docket No. 09-3797-cv 11
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R OGER T OUSSAINT , as President of Transport Workers Union, 14
Local 100, E D W ATT , as Secretary Treasurer of Transport 15
Workers Union, Local 100, 16
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Plaintiffs-Appellees, 18
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J AMES M AHONEY , as the Director of the Transport Workers Union, 20
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Plaintiff-Counter-Defendant-Appellee, 22
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J OSEPH A LLMAN , B ERNARD B EAVER , F RANK I NGRAM , L AVERNE S TUCKEY , M AURICE 24
S CHIERMAN , M ATTHEW T ARNOWSKI , on their own behalf and on behalf 25
of all others similarly situated, 26
27
Plaintiffs-Appellees, 28
29
–v.– 30
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JJ W EISER , I NC ., S TANFORD J. C OHEN , H ARVEY T. G LUCK , 32
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Defendants, 34
35
I NTERBORO M UTUAL I NSURANCE C O ., 36
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Defendant-Cross-Defendant, 38
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41

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* The Clerk of Court is directed to amend the caption as
set forth above.
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M ICHAEL J. F ITZPATRICK , J OHN M EEHAN , 1
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Defendants-Counter-Claimants-Third-Party Plaintiffs- 3
Appellants, 4
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L OCAL 100, T RANSPORT W ORKERS U NION , T RANSPORT W ORKERS U NION R ETIREES 6
A SSOCIATION , 7
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Third-Party Defendants. *
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Before: 13
W ALKER , C ALABRESI , and W ESLEY , Circuit Judges. 14
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Appeal from an order of the United States District 16
Court for the Southern District of New York (Marrero, J.) 17
entered on August 18, 2009, denying Defendants-Counter- 18
Claimants-Third-Party Plaintiffs-Appellants John Meehan and 19
Michael J. Fitzpatrick’s motion for fees and costs pursuant 20
to Section 502(g) of the Employee Retirement Income Security 21
Act of 1974, as amended (“ERISA”), 29 U.S.C. §§ 1001, et 22
seq. 23
24
A FFIRMED . 25
26
27
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N ICHOLAS H ANLON , Cary Kane LLP, for Plaintiffs- 29
Appellees. 30
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S USZANNE T ONGRING (Terrence Buehler, Touhy Touhy 32
Buehler & Williams, LLP, on the brief), for 33
Defendants-Counter-Claimants-Third-Party 34
Plaintiffs-Appellants. 35
36
37
38
39
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P ER C URIAM : 1
John Meehan and Michael Fitzpatrick (“Defendants”) are 2
former directors of a retirees association of former 3
unionized transportation workers. In an underlying ERISA 4
action, the retirees association and six of its members 5
alleged, among other things, that Defendants breached their 6
fiduciary duty to the retirees association and its members 7
by buying and maintaining a health insurance policy with 8
premiums that far outstripped the benefits received by 9
members. Defendants prevailed on all counts, see Mahoney v. 10
J.J. Weiser & Co., 564 F. Supp. 2d 248 (S.D.N.Y. 2008), 11
aff’d 339 Fed. App’x 46 (2d Cir. 2009) (summary order), and 12
sought fees and costs pursuant to 29 U.S.C. § 1132(g)(1). 13
On August 18, 2009, the United States District Court for the 14
Southern District of New York (Marrero, J.) denied 15
Defendants’ fees motion. See Mahoney v. J.J. Weiser & Co., 16
646 F. Supp. 2d 582 (S.D.N.Y. 2009). Defendants now appeal 17
that decision. 18
In denying Defendants’ motion, the district court 19
applied our Court’s five-factor test for evaluating 20
applications for attorney’s fees pursuant to 29 U.S.C. 21
§ 1132(g)(1), considering: 22

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(1) [T]he degree of the offending party’s 1
culpability or bad faith, (2) the ability 2
of the offending party to satisfy an award 3
of attorney’s fees, (3) whether an award of 4
fees would deter other persons from acting 5
similarly under like circumstances, (4) the 6
relative merits of the parties’ positions, 7
and (5) whether the action conferred a 8
common benefit on a group of pension plan 9
participants. 10
11
Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 12
869, 871 (2d Cir. 1987). The district court reasoned: 13
As to the first [Chambless] factor, 14
though Defendants ultimately prevailed on 15
the merits of their position in this Court 16
and on appeal, under the circumstances that 17
gave rise to the action at the time it was 18
filed, there is no sufficient evidence of 19
culpability or bad faith on Plaintiffs’ 20
part in commencing the litigation. 21
Concerning the need for deterrence 22
reflected in the third factor, the Court 23
agrees that given ERISA’s policy of 24
protecting plan beneficiaries, colorable 25
claims pursued in good faith, even if 26
ultimately unsuccessful, should not be 27
discouraged by awards of attorney’s fees to 28
prevailing defendants. 29
As regards the fourth factor, the 30
relative merits of the parties’ positions, 31
though Defendants’ arguments prevailed, 32
Plaintiffs’ losing claims should be 33
considered in the context of the absence of 34
culpability or bad faith as determined in 35
assessing the first factor. In this light, 36
the Court finds that Plaintiffs’ position 37
cannot be considered so substantially 38
devoid of merit as to tip the Chambless 39
factors dispositively in Defendants’ favor 40
on this basis alone. 41
42

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Mahoney, 646 F. Supp. 2d at 586 (internal citations 1
omitted). 2
Defendants contend that the district court erred in 3
light of the Supreme Court’s intervening decision in Hardt 4
v. Reliance Standard Life Insurance Co., 130 S. Ct. 2149 5
(2010). Hardt held that the proper standard for determining 6
whether a fee claimant is eligible for § 1132(g)(1) fees is 7
whether the claimant has achieved “some degree of success on 8
the merits,” not whether the claimant was a “prevailing 9
party.” Id. at 2158; see also id. at 2157. Hardt 10
recognized that its holding did not change the law in our 11
Court with respect to this issue. See id. at 2156 n.2 12
(citing Miller v. United Welfare Fund, 72 F.3d 1066, 1074 13
(2d Cir. 1995)). In any event, there is no dispute that 14
Defendants achieved both prevailing party status and some 15
degree of success on the merits in this case because the 16
district court granted summary judgment in their favor and 17
we affirmed. Accordingly, the difference between 18
“prevailing party” and “some degree of success on the 19
merits” is irrelevant here. 20
Hardt further pointed out that the Fourth Circuit’s 21
five-factor test for awarding § 1132(g)(1) fees – which 22

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mirrors our Court’s own Chambless factors – “bear[s] no 1
obvious relation to § 1132(g)(1)’s text or to our 2
fee-shifting jurisprudence.” Id. at 2158. Hardt concluded 3
that consideration of these factors is “not required for 4
channeling a court’s discretion when awarding fees under [§ 5
1132(g)(1)].” Id. Hardt nevertheless “[did] not foreclose 6
the possibility that . . . a court may consider the five 7
factors . . . in deciding whether to award attorney’s fees.” 8
Id. at 2158 n.8. 9
Hardt’s recognition that courts need not apply the 10
Chambless factors does not mean, as Defendants suggest, that 11
the district court abused its discretion when it used the 12
Chambless factors to structure its analysis. A court may 13
apply – but is not required to apply – the Chambless factors 14
in “channeling [its] discretion when awarding fees” under 15
§ 1132(g)(1). See id. at 2158. So long as a party has 16
achieved “some degree of success on the merits,” id., a 17
“court in its discretion may allow a reasonable attorney’s 18
fee and costs of action to either party.” 29 U.S.C. 19
§ 1132(g)(1). Thus, a district court must begin its 20
§ 1132(g)(1) analysis by determining whether a party has 21
achieved “some degree of success on the merits,” but it is 22

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not required to award fees simply because this pre-condition 1
has been met. Cf. Taafee v. Life Ins. Co. of N. Am., --- F. 2
Supp. 2d ---, 2011 WL 723586, at *9 (S.D.N.Y. Feb. 23, 2011) 3
(concluding that “‘some success on the merits’ . . . is all 4
a fee claimant must show to be eligible to collect 5
attorneys’ fees”). 6
Here, although the district court did not have the 7
benefit of Hardt in reaching its decision, nothing in the 8
district court’s opinion contradicts Hardt or suggests that 9
the district court would have decided the matter differently 10
in light of Hardt. Accordingly, Hardt does not require us 11
to reverse or remand. Hardt also does not disturb our 12
observation that “the five factors very frequently suggest 13
that attorney’s fees should not be charged against ERISA 14
plaintiffs.” Salovaara v. Eckert, 222 F.3d 19, 28 (2d Cir. 15
2000) (internal quotation marks omitted). This “favorable 16
slant toward ERISA plaintiffs is necessary to prevent the 17
chilling of suits brought in good faith.” Id. For this 18
reason, when determining whether attorney’s fees should be 19
awarded to defendants, we focus on the first Chambless 20
factor: whether plaintiffs brought the complaint in good 21
faith. After a thorough review of the record, we conclude 22

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that the district court did not abuse its discretion in 1
denying fees in the present case. See McDonald ex rel. 2
Prendergast v. Person Plan of the NYSA-ILA Pension Trust 3
Fund, 450 F.3d 91, 96 (2d Cir. 2006) (“Given the district 4
court’s inherent institutional advantages in this area, our 5
review of a district court’s fee award is highly 6
deferential.”); see also Zervos v. Verizon N.Y., Inc., 252 7
F.3d 163, 169 (2d Cir. 2001). 8
Based on the foregoing, the order of the district court 9
is hereby AFFIRMED. 10

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