Attorneys' Fees Need Not Be Proportional to the Claims Sought

The Seventh Circuit joined the Third, Sixth and Ninth Circuits in ruling that attorneys' fees in Employee Retirement Income Security Act of 1974 (“ERISA”) actions need not be proportional to the amount of the underlying award of damages. In Anderson v. AB Painting and Sandblasting Incorporated, 2009 WL 2525571 (7th Cir. Aug. 2009), Plaintiffs brought an action against their employer for failure to pay certain contributions into a Plan fund. The Plaintiffs were ultimately wholly successful in their claim and their employer was ordered to pay approximately $6500 dollars into the Plan fund. Plaintiffs, as the prevailing party, then sought $50,885 in attorneys' fees. The district court, feeling the fee request was “disproportionate” to the damages claimed, awarded Plaintiffs $10,000 in fees.

The Seventh Circuit overturned the district court’s ruling regarding the payment of attorneys' fees, noting that the district court’s concern with proportionality was misplaced. The Seventh Circuit pointed out that fee-shifting provisions signal Congress’ intent that violations of particular laws be punished and serve to discourage “petty tyranny”. Noting that it is no surprise that the cost to pursue a contested claim will often exceed the amount in controversy, the Seventh Circuit explained that the “reasonableness” [of the fee sought] has nothing to do with whether the claim was worth bringing; whether the cost outweighed the damages awarded. Rather, because Congress has already determined that certain claims are worth bringing by enacting fee-shifting provisions to deter violations, the district court’s role in such cases is merely to determine whether the hours spent were a reasonable means to that end.