Black et al v. Greater Bay Bancorp Executive Supplemental Compensation Benefits Plan et al, No. 3:2016cv00486 - Document 99 (N.D. Cal. 2018)

Court Description: ORDER DENYING DEFENDANTS' MOTION FOR ATTORNEYS' FEES by Judge Elizabeth D. Laporte denying 88 Motion for Attorney Fees. (tlS, COURT STAFF) (Filed on 3/27/2018)
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Black et al v. Greater Bay Bancorp Executive Supplemental Compensation Benefits Plan et al Doc. 99 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 SUSAN K BLACK, et al., Plaintiffs, 8 United States District Court Northern District of California 11 ORDER DENYING DEFENDANTS’ MOTION FOR ATTORNEYS' FEES v. 9 10 Case No.16-cv-00486-EDL GREATER BAY BANCORP EXECUTIVE SUPPLEMENTAL COMPENSATION BENEFITS PLAN, et al., Re: Dkt. No. 88 Defendants. 12 Before the Court is Defendant Greater Bay Bancorp Executive Supplemental 13 14 Compensation Benefits Plan and Wells Fargo Bank, N.A. (together, “Defendants”) motion for 15 attorneys’ fees in the amount of $363,876.50 under the Employee Retirement Income Security Act 16 (“ERISA”), 29 U.S.C. § 1001 et seq. For the reasons discussed below, the Court DENIES the 17 motion. 18 I. 19 BACKGROUND The Court’s previous order granting Defendants’ motion for summary judgment set forth 20 the full factual and procedural background of this case, so this section only contains the 21 background relevant to this motion. Plaintiffs brought this case against Defendants alleging that, 22 pursuant to the terms of a Supplemental Executive Retirement Plan and related documents, they 23 were entitled to supplemental retirement benefits payments funded by the employer annually 24 through contributions to Secular Trusts to purchase life insurance policies, as well as a life 25 insurance death benefit payable to Plaintiffs’ estate. Defendants disagreed with Plaintiffs’ 26 interpretation of the Plan documents, arguing that there was no death benefit. Plaintiffs sought 27 approximately $15 million in additional contributions to their Secular Trusts to pay for the 28 alleged death benefit. Dockets.Justia.com 1 The parties filed cross motions for summary judgment on Plaintiffs’ claims under 29 2 U.S.C. § 1132(a)(1)(B). On January 23, 2018, this Court denied Plaintiffs’ motion, granted 3 Defendants’ motion, and entered judgment for Defendants. Dkt. Nos. 86-87. Plaintiffs filed a 4 notice of appeal with the Ninth Circuit. Dkt. No. 95. Defendants subsequently filed a motion for attorneys’ fees pursuant to 29 U.S.C. § 5 6 1132(g)(1) on February 6, 2018. Dkt. No. 88. Plaintiffs opposed the motion on February 20, 7 2018. Dkt. No. 92. Defendants filed their reply on February 27, 2018. Dkt. No. 97. 8 II. LEGAL STANDARD ERISA provides that “[i]n any action under this subchapter (other than an action described 10 in paragraph (2))1 by a participant, beneficiary, or fiduciary, the court in its discretion may allow a 11 United States District Court Northern District of California 9 reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). As its terms 12 suggest, such awards are not limited to prevailing plaintiffs, but may be awarded to “either party.” 13 The Ninth Circuit has held that the court should not “‘favor[ ] one side or the other’” when 14 determining whether to award attorneys-fees in ERISA matters. Cline v. Indus. Maint. Eng’g & 15 Contracting Co., 200 F.3d 1223, 1236 (9th Cir. 2000) (quoting Estate of Shockley v. Alyeska 16 Pipeline Serv. Co., 130 F.3d 403, 408 (9th Cir. 1997); see also Honolulu Joint Apprenticeship & 17 Training Comm. of United Ass’n Local Union No. 675 v. Foster, 332 F.3d 1234, 1239 (9th Cir. 18 2003) (“we have gone to some lengths to make clear that the availability of fees is not limited to 19 participants and beneficiaries, and have also approved the award of fees or partial fees to 20 prevailing plans”). 21 To obtain an award under Section 1132(g)(1), “a fees claimant must show ‘some degree of 22 success on the merits’ before a court may award attorney’s fees.” Hardt v. Reliance Standard Life 23 Ins. Co., 560 U.S. 242, 255 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 24 (1983)). The Supreme Court has defined “some degree of success on the merits” as follows: A claimant does not satisfy that requirement by achieving “trivial success on the merits” or a “purely procedural victor[y],” but does 25 26 27 28 Paragraph (2) of 29 U.S.C. § 1132(g) provides for a mandatory award of reasonable attorneys’ fees and costs in actions for the payment of delinquent contributions under 29 U.S.C. § 1145. That section is not applicable to this case. 2 1 satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a “lengthy inquir[y] into the question whether a particular party’s success was ‘substantial’ or occurred on a ‘central issue.’” 1 2 3 Id. (quoting Ruckelshaus, 463 U.S. at 688 n.9). 4 Once it is established that a fees claimant has shown the requisite “degree of success,” the 5 court must analyze the five factors set forth in Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 6 (9th Cir. 1980): 1. [T]he degree of the opposing party’s culpability or bad faith, 2. [T]he ability of the opposing party to satisfy an award of fees, 3. [W]hether an award of fees would deter others from acting in similar circumstances, 4. [W]hether the party requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA, and 5. [T]he relative merits of the parties’ positions. 7 8 9 10 United States District Court Northern District of California 11 12 Cline, 200 F.3d at 1235 (citing Hummell, 634 F.2d at 453). “No one of the Hummell factors, however, is necessarily decisive, and some may not be pertinent in a given case.” Carpenters S. 13 Cal. Admin. Corp. v. Russell, 726 F.2d 1410, 1416 (9th Cir. 1984) (citation omitted). The factors 14 “reflect a balancing,” and the Court “need not find that each factor weighs in support of fees” in 15 order to grant an award. McElwaine v. U.S.W., Inc., 176 F.3d 1167, 1173 (9th Cir. 1999). While 16 17 these factors apply to both sides, they “very frequently suggest that attorney’s fees should not be charged against ERISA plaintiffs.” Credit Managers Ass’n of S. Cal. v. Kennesaw Life & Acc. 18 Ins. Co., 25 F.3d 743, 749 (9th Cir. 1994) (internal quotation marks and citations omitted). 19 Finally, if the Court finds that an award of fees is appropriate in light of the Hummell 20 factors, the party seeking the fee award must show that its requested fees are reasonable. See 21 D’Emanuele v. Montgomery Ward & Co., Inc., 904 F.2d 1379, 1383 (9th Cir. 1990). 22 23 III. DISCUSSION The sole question on this motion is whether the Court should exercise its discretion to 24 award Defendants’ attorneys’ fees as the prevailing party in this case. Defendants seek a total 25 award of $363,876.50. 26 27 A. Terms of the Compensation Agreements The Court has already found that Plaintiffs were not owed a secured death benefit under 28 3 1 the terms of the applicable Compensation Agreements. Although ERISA permits a discretionary 2 award of attorneys’ fees, Defendants originally also noted that they are owed their legal fees under 3 the terms of the Compensation Agreements, which provide that: 4 In the event of any arbitration or litigation concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this Agreement or the breach hereof, or the interpretation hereof, the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, attorneys’ fees and costs incurred in connection therewith or in the enforcement or collection of any judgment or award rendered therein. The “prevailing party” means the party determined by the arbitrator(s) or court, as the case may be, to have most nearly prevailed, even if such party did not prevail in all matters, not necessarily the one in whose favor a judgment is rendered. 5 6 7 8 9 Dkt. Nos. 76-1, 76-2, ¶ XII.E; Dkt. No. 76-3 ¶ XI.E (emphasis added). Defendants do not rest 11 United States District Court Northern District of California 10 their request for attorneys’ fees on a contractual basis, however, as they state that they “are now 12 seeking to enforce this bargained-for attorneys’ fees provision, albeit through ERISA Section 13 502(g).” Mot. at 4. The terms of the Compensation Agreement are irrelevant because a plan 14 provision cannot alter ERISA’s statutory fee-shifting rule. See Heimeshoff v. Harford Life & 15 Acc. Ins. Co., __ U.S. __, 134 S. Ct. 604, 610 (2013). Therefore, the Court has disregarded this 16 provision of the Compensation Agreements in deciding this motion. 17 B. 18 Through motions to dismiss, Defendants whittled this case down to one claim for benefits Prevailing Party Status 19 under Section 502(a)(1)(B).2 In the end, the Court granted summary judgment in Defendants’ 20 favor. The parties do not dispute that Defendants are prevailing parties for purposes of an 21 attorneys’ fees award under ERISA. 22 C. 23 Defendant argues that each of the five Hummell factors weigh in favor of granting its 24 Hummell Factors request for attorneys’ fees. 25 1. Plaintiff’s Culpability or Bad Faith Defendants do not suggest that Plaintiffs acted in bad faith in bringing this litigation, but 26 27 2 28 The operative complaint includes two claims for benefits under Section 502(a)(1)(B), but they are duplicative of each other, so there was effectively only one claim left at summary judgment. 4 1 they do contend that “Plaintiff’s relentless pursuit of meritless claims is precisely the type of 2 culpable conduct that makes an award of fees appropriate here.” Mot. at 6 (citing Dublin Eye 3 Assocs., P.C. v. Mass. Mt. Life Ins. Co., 2014 WL 1217664, at *8 (E.D. Ky. Mar. 24, 2014) 4 (finding plaintiff’s culpability in wasting the court’s time with meritless claims justified a fee 5 award to defendant); Foley v. Bethlehem Steel Corp., 30 F. Supp. 2d 366, 368 (W.D.N.Y. 1998) 6 (“Although plaintiff did not demonstrate any extreme instances of bad faith, he did pursue this 7 meritless litigation in an almost haphazard fashion, changing legal theories and defendants for the 8 first several years of litigation, making an award of fees appropriate.”)). 9 Defendants base this argument about Plaintiffs’ “relentless pursuit of meritless claims” on two grounds, which Defendants claim shows that Plaintiffs could not have reasonably believed 11 United States District Court Northern District of California 10 that “they could prove an actionable ERISA claim,” citing Cline, 200 F.3d at 1236. First, they 12 argue that Plaintiffs twice made a claim for breach of fiduciary duty in successive complaints, 13 even though the Court explained that this type of claim was not viable on the alleged facts and 14 under Ninth Circuit law. See Dkt. Nos. 44 & 61 (dismissing Plaintiffs’ breach of fiduciary duty 15 claim because Defendants had no duty to Plaintiffs regarding assets in the Trusts that Plaintiffs 16 themselves controlled). Second, they contend that Plaintiffs continued pursuing their claim for 17 benefits even though the Court stated in its order granting dismissal of the first amended complaint 18 that it was skeptical that the Plan documents alone provided the benefits Plaintiffs sought. The 19 Court’s order explained that “[i]f the Compensation Agreement were the sole Plan document, 20 these provisions might foreclose the possibility that a guaranteed death benefits from the life 21 insurance policies were contemplated” and that “[t]hese terms of the Trust Agreement do tend to 22 support Defendants’ position that the annual contributions to the Trusts were intended only to fund 23 Plaintiffs’ supplemental benefits, and not to also fully fund life insurance policies to provide death 24 benefits.” Dkt. No. 44 at 11, 12. By continuing to press their claims under the Plan documents, 25 Defendants argue that Plaintiffs wasted everyone’s time and resources. 26 The Court’s comment at the pleading stage that it was not convinced Plaintiffs could make 27 out a winning claim under the Plan documents is not an adjudication on the merits or even 28 necessarily an indication that Plaintiffs lacked a colorable claim. As Plaintiffs point out, in ERISA 5 1 cases the “culpability” of a losing plaintiff significantly differs from that of a losing defendant. A losing defendant must have violated ERISA, thereby depriving plaintiffs of rights under a pension plan and violating a Congressional mandate. A losing plaintiff, on the other hand, will not necessarily be found “culpable,” but may be only in error or unable to prove his case. 2 3 4 5 Marquardt v. N. Am. Car Corp., 652 F.2d 715, 720 (7th Cir. 1981); accord Carpenters, 726 F.2d at 6 1416. In arguing that Defendants have not shown that Plaintiffs acted culpably, Plaintiffs contrast 7 their conduct with that in Credit Managers, where the plaintiff receiver continued to pursue a 8 claim after remand from the Ninth Circuit when it knew it had no evidence to support the claim. 9 See Credit Managers, 25 F.3d at 749. In finding bad faith that supported a fee award, the court 10 noted that the district court “made clear that its decision to allow the case to proceed to trial was 11 United States District Court Northern District of California based primarily on misrepresentations made by CMA and its counsel regarding the facts that it 12 could prove.” Id. Plainly, this conduct is distinctly different Plaintiffs’. 13 Other cases cited by Defendants are more on point. In Dublin Eye Assocs, the court 14 entered a fee award against plaintiff trustees who brought a time-barred lawsuit against a service 15 provider whom they alleged sold improper life insurance policies to their plan more than a decade 16 earlier. 2014 WL 1217664, at *2. The culpability factor of the Hummell test favored an award of 17 18 fees because plaintiffs “were willfully ignorant of their obligations as Trustees and of the Plan investments.” Id. at *5. In Foley, the plaintiff claimed that he had been terminated from 19 employment for the purpose of interfering with his pension, an ERISA violation. 30 F. Supp. 2d 20 at 368. He filed his suit ten years after his discharge, his claim was time barred, he had no 21 evidence of illegal motivation for the firing, and there was ample evidence of a legitimate motive. 22 Id. 23 These cases are easily distinguishable from the way Plaintiffs litigated their ERISA claims 24 in this lawsuit. Although the Court ultimately concluded that Plaintiffs could not prove their case 25 26 and entered judgment in Defendants’ favor, their claims were not groundless and were not barred by the statute of limitations. Defendants’ reply brief contends that Plaintiffs misrepresented that 27 all of the benefits projections showed that death benefits did not fall below face value and that 28 6 1 Wells Fargo’s predecessor interpreted the Plan in the same they that Plaintiffs did. While the 2 Court did not find Plaintiff’s analysis of the benefits projections persuasive, they put forward good 3 faith, if mistaken, arguments for their position that the documents supported their claims. The 4 Court does not conclude that they deliberately lied. Moreover, Defendants’ citation to Angichiodo 5 v. Honeywell Pension & Savings Plan, 2017 WL 1833586, at *2 (D. Ariz. May 8, 2017), is 6 unavailing where the court found that the plaintiff was culpable because she had all of the 7 information she needed before filing suit to correct her misunderstanding of how the benefits 8 claim process worked. Plaintiffs had other bases for their benefits claims, although these, too, did 9 not prevail in the end. For example, they relied upon a summary plan description, which they argued was a Plan document and provided for a secured death benefit. Accordingly, there is no 11 United States District Court Northern District of California 10 basis for concluding that Plaintiffs acted culpably or in bad faith in pursuing this litigation, and 12 this factor does not weigh in favor of an award of attorneys’ fees. 13 14 2. Ability of Plaintiffs to Satisfy an Award of Fees The second factor is whether Plaintiffs have the ability to satisfy an award of attorneys’ 15 fees. Defendants point to the annual retirement benefits that they are entitled to receive ($144,523 16 for Black, $149,777 for Burgess, and $223,501 for Smith, plus 3% annual increases) as evidence 17 that they can satisfy the requested $363,876.50 (or $121,292.17 divided three ways) fee award. 18 Defendants also note that they were each highly compensated individuals during the course of 19 their careers. 20 Plaintiffs respond that they are not in a position to pay the requested fees. They state that 21 the loss of life insurance that they expected to receive has dealt them a “severe financial blow,” as 22 they must scramble to make other arrangements for their estates. Opp. at 7. They also raise the 23 specter that some of their retirement income can transition from non-taxable to taxable income if 24 interest rates stay the same. Moreover, they are all in their sixties and have significant health 25 issues, and Defendants’ requested fees would significantly reduce the total annuities they are 26 expected to receive from the Plan. Therefore, they are not able to pay Defendants’ legal fees in 27 addition to their own. Even if they were able to pay Defendants’ fees, this factor does not weigh 28 in favor of awarding fees where “defendants are as able as [the plaintiffs] to bear the cost of their 7 1 attorneys fees.” Bogue v. Ampex, 976 F.2d 1319, 1327 (9th Cir. 1992). As one of the country’s 2 largest banks, Defendants can pay the attorneys’ fees they incurred defending this case, and almost 3 certainly more easily than Plaintiffs would be able to do as individuals. 4 Defendants reply that if Plaintiffs are now contending that they are unable to pay its 5 attorneys’ fees, then they should be afforded an opportunity to conduct post-judgment discovery. 6 Rule 69 provides that: “In aid of the judgment or execution, the judgment creditor or a successor 7 in interest whose interest appears of records may obtain discovery from any person -- including 8 the judgment debtor -- as provided in these rules or by the procedure of the state where the court is 9 located.” Fed. R. Civ. P. 69(a)(2). However, this rule is used “to enforce the judgment by way of the supplemental proceedings.” Danning v. Lavine, 572 F.2d 1386, 1390 (9th Cir. 1978). 11 United States District Court Northern District of California 10 Defendants do not provide any authority for permitting this kind of discovery before the Court has 12 entered a money judgment (here, by way of an award of attorneys’ fees), and such discovery 13 would not be appropriate in this situation. 14 15 16 17 For all of the reasons Plaintiffs articulate, this factor does not weigh in favor of an award of attorneys’ fees. 3. Whether an Award Would Deter Others Defendants argue that an award of its attorneys’ fees will deter other sophisticated 18 participants from pursuing other claims, which Defendants contend have no basis in the Plan 19 documents, citing Credit Managers, 25 F.3d 743 (awarding attorneys’ fees to defendants and 20 thereby “serv[ing] the purposes of ERISA by discouraging other litigants from relentlessly 21 pursuing groundless claims”); Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 446 (9th Cir. 2006) 22 (awarding attorneys’ fees to defendant “not to deter plaintiffs from bringing colorable claims for 23 benefits, but from unnecessarily expanding the scope and complexity of litigation”); Carty v. 24 Metropolitan Life Ins., 2017 WL 660680, at *5 (M.D. Tenn. Feb. 17, 2017) (explaining that it is 25 appropriate to deter not only deliberate misconduct but also conduct that is “reckless or 26 negligent”). Defendants argue that such an award vindicates the “‘careful balanc[e]’ between 27 ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation 28 of such plans.” Aetna Health Inc. v. Davila, 542 U.S. 200, 215 (2004) (quoting Pilot Life Ins. Co. 8 1 2 v. Dedeaux, 481 U.S. 41, 55 (1987)). The interest in deterring meritless claims, however, is balanced against the interest in 3 ensuring that plan participants are not overdeterred from pursuing the prompt enforcement of their 4 rights under a plan. See Honolulu Joint Apprenceticeship & Training Comm. of United Ass’n 5 Local Union No. 675 v. Foster, 186 F. Supp. 2d 1114, 1122-23 (D. Haw. 2001), aff’d, 332 F.3d 6 1234 (9th Cir. 2003) (“The deterrence factor of an attorney’s fee award is generally aimed at 7 protecting participants in employee benefit plans against the abuses or administrative failures of 8 the plan, circumstances which are not present here.”); see also Corder v. Howard Johnson & Co., 9 53 F.3d 225, 231-32 (9th Cir. 1994) (explaining that fee awards will “tend to deter marginal but meritorious” claims by plan participants, contrary to Congressional intent); Tingey v. Pixley- 11 United States District Court Northern District of California 10 Richards W., Inc., 958 F.2d 908, 910 (9th Cir. 1992) (“We see little benefit to be had by charging 12 individual plan-beneficiary plaintiffs . . . with costs for policy reasons that speak more 13 appropriately to institutional litigants in the ERISA arena,” and noting that this factor is generally 14 more appropriate when considering whether to award fees to a plaintiff). 15 There is no clear benefit to deterring colorable but ultimately losing claims, such as the 16 ones brought by Plaintiffs. See Salovaara v. Eckert, 222 F.3d 19, 31 (2d Cir. 2000) (“where, as in 17 this case, an ERISA plaintiff has pursued a colorable (albeit unsuccessful) claim, the third 18 [deterrence] factor likely is not merely neutral, but weighs strongly against granting fees to the 19 prevailing defendant”). It would be contrary to the public policy interest of encouraging good 20 faith ERISA claims to award fees where, as in this case, Plaintiffs did not bring a meritless claim. 21 This is in contrast to situations that might warrant an award of attorneys’ fees against a plan 22 participant who brought patently meritless claims. See Reilly v. Charles M. Brewer Ltd. Money 23 Purchase Pension Plan & Trust, 349 Fed. App’x 155 (9th Cir. 2009) (affirming award where the 24 plaintiff, a self-represented attorney, who had lost his ERISA claims, filed a second identical 25 lawsuit, which was dismissed on res judicata grounds). 26 Plaintiffs also contend that there is no precedent for requiring ERISA plaintiffs to pay a 27 six-figure attorneys’ fee award as Defendants seek. They point out that the cases Defendants cite 28 in its opening motion did not award fees against a plan participation in an amount that is greater 9 1 than the low five figures. In Reilly, the defendant sought award of $29,704 for prevailing at the 2 pleadings stage on its res judicata defense, but the court reduced the award to $14,871. Id. In 3 Shockley, the court awarded fees to defendant but reduced the requested amount by 90 percent out 4 of a concern for overdeterrence. See Shockley, 130 F.3d at 405, 408 (9th Cir. 1997). In Foley, the 5 court awarded a fee of $10,000 out of the requested $40,000 plus costs, to be paid at $100 per 6 month for the remainder of the plaintiff’s life or until he had paid the total without interest. See 7 Foley, 30 F. Supp. 3d at 369. 8 While Defendants counter that several courts have granted six-figure attorneys’ fee awards 9 in ERISA cases, in those cases the plaintiff acted with bad faith or culpability or other unique facts existed that are not analogous to this case. See Stark v. PPM Am., Inc., 354 F.3d 666, 674 (7th 11 United States District Court Northern District of California 10 Cir. 2004) (affirming fees award of $261,529 of requested $493,470 against individual whose 12 claims were found to not be substantially justified); Moore v. Lafayette Life Ins. Co., 458 F.3d 13 416, 445-48 (6th Cir. 2006) (affirming award of $120,976.48 in case where the district court found 14 that the plaintiff did not litigate in good faith); DeBartolo v. Health & Welfare Dep’t of the Const. 15 & Gen. Laborers’ Dist. Council of Chicago & Vicinity, 2011 WL 1131110, at *14 (N.D. Ill. Mar. 16 28, 2011) (granting fees award, which was later determined to be $121,601.43, where the court 17 found that the plaintiff’s claims were not substantially justified because the plaintiff lacked 18 standing, his claims were time barred, he failed to exhaust administrative remedies, and he lacked 19 a colorable basis for his claims); Moreno v. S.J. Weaver Contracting, Inc., 2006 WL 2827908, at 20 *3 (N.D. Cal. Oct. 3, 2006) (granting defendants’ fees request in part where the court agreed with 21 the individual defendant’s long-standing argument that there were no grounds for establishing a 22 legal or factual basis for the plaintiff’s claim against him; ultimately the parties settled the case 23 without a final determination from the court on the amount of the requested $122,702.80 in fees 24 that the defendant requested). 25 The Court is persuaded that the risk of deterring colorable ERISA claims of plan 26 participants weighs against awarding attorneys’ fees here. Accordingly, this factor weighs against 27 an award of attorneys’ fees. 28 10 1 2 4. Whether the Party Requesting Fees Sought to Benefit All Participants or Resolve a Significant Legal Question The Ninth Circuit has explained that this factor is generally “more appropriate to a 3 determination of whether to award fees to a plaintiff than a defendant,” so this factor is of lesser 4 significance to the Hummell analysis in this case. See Tingey, 958 F.2d at 910 (quoting 5 Marquardt v. North Am. Car Corp., 652 F.2d 715, 719 (2d Cir. 1981)). Nonetheless, Defendants 6 argue that an award is warranted because they have resolved several significant legal questions in 7 the course of defending this case. First, they established that a successor entity does not need to 8 provide a summary plan document at the time it takes control of a predecessor and also does not 9 need to take “some other affirmative action to inform [participants] of [an administrator’s] interpretation of the Plan documents at that time.” Dkt. No. 61 at 15-16 (Court’s order granting 11 United States District Court Northern District of California 10 Defendants’ motion to dismiss Plaintiffs’ fiduciary duty claim in the second amended complaint). 12 Second, they established that the Plan documents do not contain a promise to fund the face value 13 of the life insurance policies in addition to funding the annuity itself, which provides further 14 clarity for other participants about the benefits they are entitled to receive. 15 Here, Wells Fargo was defending itself, rather than proactively vindicating legal rights. 16 However, Defendants are correct that the Court resolved these legal questions in their favor, which 17 help provide guidance to other participants as they consider the extent of their rights under the 18 Plan. At the same time, Defendants have not indicated how large the universe of participants in 19 the Plan is, and in earlier proceedings there was a suggestion that Plaintiffs’ claims are the first 20 ones that have ever been made under the Plan. Therefore, any benefit that resolution of these 21 questions has for other participants might be fairly limited. While not particularly weighty in the 22 overall consideration of this motion, this factor weighs slightly in favor of granting an award. 23 24 5. Relative merits of the Parties’ Positions While the Court ultimately ruled in Defendants’ favor, the final question about whether the 25 Plan provided for full funding of the life insurance policies was not an easy question. Although 26 the Court followed Ninth Circuit precedent and ruled in favor of Defendant when it was “not left 27 with the ‘definite and firm conviction that a mistake ha[d] been committed,’” it also commented 28 that Plaintiffs’ arguments were “not groundless,” although “ultimately not persuasive.” Dkt. No. 11 1 86 at 17, 23. Plaintiffs raised colorable claims and legitimate arguments about the terms of the 2 Plan, the role of non-Plan documents, and extrinsic evidence. Plaintiffs’ claims were not 3 meritless, even if they did not win the day. Thus, this factor is neutral. 4 Upon review of the five Hummell factors, the Court concludes that they do not weigh in 5 favor of awarding attorneys’ fees to Defendants in this case. Accordingly, the Court DENIES 6 Defendants’ motion for attorneys’ fees. 7 IT IS SO ORDERED. 8 Dated: March 27, 2018 9 10 ELIZABETH D. LAPORTE United States Magistrate Judge United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12