Xerox Must Pay $4.9M in Fees, Costs in Pension Benefits Case

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By Carmen Castro-Pagan

Dec. 13 — Xerox Corp. must pay nearly $4.9 million in attorneys’ fees and costs to workers who accused the company of miscalculating their pension benefits by using a “phantom account” to offset an earlier lump-sum payment, the U.S. District Court for the Western District of New York ruled ( Frommert v. Conkright , 2016 BL 412065, W.D.N.Y., No. 6:00-cv-06311-DGL-JWF, 12/12/16 ).

Judge David G. Larimer granted Dec. 12 the workers’ request for attorneys’ fees but reduced by almost half the $7.9 million they initially requested. In doing so, Larimer allowed the use of “out-of-district” billing rates for the workers’ counsel but declined to use contemporary billing rates because they were “unreasonably high.” Instead, he opted for more “reasonable and adequate” 2011 rates. He also applied a 50 percent reduction of fees to the work of an attorney who died during the litigation and who failed to prepare contemporaneous time records.

The ruling may put an end to the expensive, long-running lawsuit that started 16 years ago and has made several trips to the U.S. Court of Appeals for the Second Circuit and the U.S. Supreme Court. Xerox has already paid some $4 million to its workers based on decisions issued by trial and appeals courts, according to court documents.

“We are proud to have been awarded a significant, multi-million dollar fee in this long-running litigation, and to have been recognized, in terms of the rates awarded, for the work we do and have done nationwide in complicated pension disputes,” Brendan S. Maher of Stris & Maher LLP who represented the Xerox workers told Bloomberg BNA Dec. 13.

Recent Rulings on Fees

The decision follows Larimer’s recent ruling in In re Eastman Kodak ERISA Litigation, in which he took issue with the billing rates requested by class counsel in an Employee Retirement Income Security Act case. In Kodak, Larimer said that class counsel’s billing rates, which ranged from $250 to $390 per hour for in-district counsel to as much as $950 per hour for out-of-district counsel, grossly exceeded the typical reasonable hourly rates in the Western District of New York.

The Kodak decision contrasts with a decision by a judge in North Carolina who earlier this year found that a billing rate of $998 per hour for veteran attorneys was reasonable.

Xerox workers sought fees based on hourly rates ranging from $250 to $675 per hour. In opposing these rates, Xerox said the court shouldn’t award more than $300 per hour for partners and $200 for associates. In October, Larimer ordered Xerox to disclose the billing rates charged by its own attorneys.

Without disclosing how much Xerox paid its own attorneys, Larimer said that the rates claimed by the workers’ attorneys were “at least consonant” with Xerox attorneys. Larimer also found that it was reasonable for the workers to use out-of-town counsel and that the hourly rates to be applied to them weren’t strictly bound by what a local counsel would typically charge.

However, he declined to use current billing rates because “even in 2016, rates in excess of $500 an hour are quite substantial, and easily exceed what is typical for this district, and likely many other districts as well.”

Stris & Maher LLP, Law Offices of John A. Strain, Schell & Schell, Shaun P. Martin and Trevett Cristo Salzer & Andolina PC represent the workers. Littler Mendelson PC and Covington & Burling LLP represent Xerox.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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