Munger v. Intel Corporation

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

RUTH ANN MUNGER, Individually, and No. 3:22-cv-00263-HZ

in her Capacity as Co-Personal

Representative of the Estate of Philip Louis OPINION & ORDER

Cloud,

Plaintiff,

v.

INTEL CORPORATION, a Delaware

Corporation, as Plan Administrator of the

Intel Retirement Contribution Plan, Intel

401(K) Savings Plan; Intel Minimum

Pension Plan, Intel Retiree Medical Plan,

and Sheltered Employee Retirement

Medical Account; and TRACY

LAMPRON CLOUD,

Defendants.

Erin K. Olson

Law Office of Erin Olson, P.C.

1631 N.E. Broadway Street #816

Portland, OR 97232-1425

Megan Johnson

Johnson McCall LLP

200 SW Market Street

Suite 950

Portland, OR 97201

Attorneys for Plaintiff

Sarah J. Ryan

Anthony Copple

Donald P. Sullivan

Jackson Lewis P.C.

200 SW Market Street, Suite 540

Portland, Oregon 97201

Attorneys for Intel Defendants

Tracy Lampron Cloud

#23662184

Coffee Creek Correctional Facility

24499 S.W. Grahams Ferry Road

Wilsonville, OR 97070

Defendant, Pro Se

HERNÁNDEZ, District Judge:

This matter comes before the Court on the Motion of Counter and Cross Claimants in

Interpleader Intel Corporation, the Intel Retirement Plans Administrative Committee, and the

Intel Benefits Administration Committee (“Intel”) for Attorneys’ Fees, ECF 99. For the reasons

that follow, the Court grants Intel’s Motion and awards Intel attorney fees in the amount of

$20,297.79.

BACKGROUND

Philip Louis Cloud (“Philip Cloud”) was an employee of Intel Corporation and a

participant in five employee benefit plans (the Plans) through his employment with Intel

Corporation: (1) the Intel 401(k) Savings Plan; (2) the Intel Retirement Contribution Plan (“RC

Plan”); (3) the Intel Minimum Pension Plan (“MP Plan”); (4) the Intel Retiree Medical Plan

(“IRM Plan”); and (5) the Intel Sheltered Employee Retirement Medical Account (“SERMA”).

The Plans provided that Philip Cloud’s wife, Defendant Tracy Cloud (“Cloud”), was his primary

beneficiary and his estate was the secondary beneficiary.

On September 23, 2019, Cloud killed Philip Cloud.

At some point before February 11, 2020, the Estate of Philip Cloud through Ruth Ann

Munger filed in Washington County Circuit Court a probate case, a trust matter, and a wrongful-

death action related to Cloud’s killing of Philip Cloud seeking resolution of the “respective

property interests, rights, claims, assets, and liabilities” of Philip Cloud and Cloud.

On November 13, 2020, Ruth Ann Munger, acting on behalf of Philip Cloud’s estate,

submitted a claim to the Intel Retirement Plans Administrative Committee seeking Philip

Cloud’s Plan benefits on the basis that Oregon and federal law prohibit slayers from profiting

from their crimes. The Committee did not distribute the Plan benefits.

On November 9, 2021, a Washington County jury convicted Cloud of second degree

murder.

On February 17, 2022, Ruth Ann Munger, individually and in her capacity as personal

representative of the Estate of Philip Cloud, filed a Complaint in this Court pursuant to ERISA,

29 U.S.C. § 1001 et seq., in which she sought payment of Philip Cloud’s Plan benefits to the

Estate of Philip Cloud on the basis that Cloud is the “slayer” of Philip Cloud and, therefore, she

is not entitled to any Plan benefits.

On November 15, 2022, Intel filed a Counterclaim and Crossclaim for Interpleader and

Request for Declaratory Relief in which it noted the competing claims to the Plan benefits and

requested this Court determine the rights of the parties to certain proceeds payable from the

Plans.

On October 13, 2023, this Court granted summary judgment in favor of Plaintiff, ordered

distribution of the 401(k) and RC Plan benefits to the Estate of Philip Cloud, and ordered that no

entity or person was entitled to benefits of the MP Plan, the IRM Plan, or the SERMA. The

Court entered a Judgment on October 23, 2023.

On November 6, 2023, Intel filed a Motion for Attorneys’ Fees in which it seeks fees in

the amount of $20,297.79. Plaintiff “takes no position” on Intel’s Motion.

STANDARDS

“A disinterested stakeholder's entitlement to attorney's fees in an interpleader action” and

“the amount of fees to be awarded in an interpleader action” are committed to the sound

discretion of the district court.” MacPherson-Pomeroy v. N. Am. Co. for Life & Health Ins., No.

120CV00092ADABAM, 2023 WL 5722632, at *2 (E.D. Cal. Sept. 5, 2023)(quoting Schirmer

Stevedoring Co. v. Seaboard Stevedoring Corp., 306 F.2d 188, 194 (9th Cir.1962)). “Interpleader

is a valuable procedural device for ERISA plans who are confronted with conflicting multiple

claims upon the proceeds of an individual's benefit plan. . . . [T]he interpleader plaintiff

effectively disclaims any position as to which of the claimants is entitled to the fund.” Tr. of Dir.

Guild of Am.-Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 426 (9th Cir.), opinion

amended on denial of reh'g, 255 F.3d 661 (9th Cir. 2000). “Because the interpleader plaintiff is

supposed to be disinterested in the ultimate disposition of the fund, attorneys' fee awards are

properly limited to those fees that are incurred in filing the action and pursuing the plan's release

from liability, not in litigating the merits of the adverse claimants' positions.” Id. (citing Schirmer

Stevedoring, 306 F.2d at 194). Compensable expenses include things such as “preparing the

complaint, obtaining service of process on the claimants to the fund, and preparing an order

discharging the plaintiff from liability and dismissing it from the action.” Id. (citation omitted).

“Because the scope of compensable expenses is limited, attorneys' fee awards to the

“disinterested” interpleader plaintiff are typically modest.” Id. at 427 (citing Schirmer

Stevedoring, 306 F.2d at 194–95; Prudential Ins. Co. v. Boyd, 781 F.2d 1494 (11th Cir.1986); In

re Technical Equities Corp., 163 B.R. 350, 360–61 (Bkrtcy.N.D.Cal.1993)(collecting cases)). In

addition, “because the attorneys' fees are paid from the interpleaded fund itself, there is an

important policy interest in seeing that the fee award does not deplete the fund at the expense of

the party who is ultimately deemed entitled to it.” Id. The Court “undertakes a lodestar analysis

to guide its determination regarding the appropriate amount of attorneys’ fees and costs.”

Principal Life Ins. Co. v. Calloway Est. of Perkins, No. 119CV00147DADSKO, 2021 WL

720648, at *3 (E.D. Cal. Feb. 24, 2021).

DISCUSSION

I. Lodestar Calculation

Under the lodestar analysis the court calculates the “lodestar” by “multiplying the number

of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate.”

Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 1996). After calculating the lodestar the

court then “assesses whether it is necessary to adjust the presumptively reasonable lodestar

figure on the basis of . . . factors that are not already subsumed in the initial lodestar

calculation.”1 Id. at 363-64 (citing Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.

1975)).

A “strong presumption” exists that the lodestar figure represents a “reasonable fee,” and

therefore, it should only be enhanced or reduced in “rare and exceptional cases.” Pa. v. Del.

Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986). While it is not necessary to

1 Factors subsumed within the lodestar include the novelty and complexity of the issues, special

skill and experience of counsel, quality of the representation, results obtained, and the superior

performance of counsel. D'Emanuele v. Montgomery Ward & Co., 904 F.2d 1379, 1383 (9th Cir.

1990).

detail every numerical calculation, and across-the-board percentage adjustments are permissible,

the court must provide “enough of an explanation to allow for meaningful review of the fee

award.” Sorenson v. Mink, 239 F.3d 1140, 1146 (9th Cir. 2001).

II. Analysis

As noted, Plaintiff did not object to Intel’s requested attorney fees. Nevertheless, the

Court has “an independent duty to review the fee petition for reasonableness.” Sarkisian v.

Newmar Indus., Inc., No. 3:21-CV-01123-IM, 2023 WL 7911763, at *4 (D. Or. Nov. 16, 2023).

A. Reasonable Rate

In determining the reasonable hourly rate, the court determines what a lawyer of

comparable skill, experience, and reputation could command in the relevant community. Blum v.

Stenson, 465 U.S. 886, 895 n.11 (1984); see also Robins v. Scholastic Book Fairs, 928 F. Supp.

1027, 1033 (D. Or. 1996). In determining a reasonable hourly rate, “the relevant community is

the forum in which the district court sits.” Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997).

“The fee applicant has the burden of producing satisfactory evidence, in addition to the affidavits

of its counsel, that the requested rates are in line with those prevailing in the community for

similar services of lawyers of reasonably comparable skill and reputation.” Jordan v. Multnomah

Cnty., 815 F.2d 1258, 1263 (9th Cir. 1987). Judges in the District of Oregon use the Oregon

State Bar Economic Survey (“OSB Economic Survey”) as a benchmark for assessing the

reasonableness of hourly billing rates. See Roberts v. Interstate Distrib. Co., 242 F.Supp.2d 850,

857 (D. Or. 2002)(in determining the reasonable hourly rate, the District of Oregon uses the OSB

Economic Survey “as an initial benchmark” and attorneys should “provide ample justification”

for deviating from the Survey rates). The most recent OSB Economic Survey was published in

2022.2 Courts may also consider “the novelty and difficulty of the issues, the skill required to try

the case, whether or not the fee is contingent, the experience held by counsel and fee awards in

similar cases.” Moreno v. City of Sacramento, 534 F.3d 1106, 1114 (9th Cir. 2008).

Although Intel states that Sarah Ryan billed Intel for her services at the rate of

$609 per hour and Donald Sullivan billed Intel for his services at the rate of $730 per hour, Intel

also notes those attorneys applied an 18% discount to their fees in the Motion for Attorneys Fees.

Accordingly, Ryan seeks fees at an effective rate of $499.38 per hour and Sullivan seeks fees at

an effective rate of $598.60 per hour.

1. Attorney Ryan

Ryan has been a member of the Oregon State Bar for 40 years, has more

than 30 years of litigation experience, and has tried several bench and jury trials to verdict in

various courts in Oregon and Washington. Ryan’s fee request is supported by Sullivan’s

Declaration. According to the 2022 OSB Economic Survey, the median hourly rate for Portland

attorneys with more than 30 years of experience is $425 and 95th percentile hourly rate is $798.

The Court therefore finds Ryan’s requested effective rate of $499.38 per hour is reasonable.

2. Attorney Sullivan

Sullivan has been a member of the California State Bar for 26 years, has

focused his practice for more than 20 years in the area of ERISA and employee benefits, and has

tried multiple ERISA actions to verdict in various district courts. Sullivan’s fee request is

supported by his Declaration. According to the 2022 OSB Economic Survey, the median hourly

rate for Portland attorneys with between 21 and 30 years of experience is $450 and 95th

2 The most recent OSB Economic Survey is available at

https://www.osbar.org/_docs/resources/Econsurveys/22EconomicSurvey.pdf

percentile hourly rate is $697. The Court therefore finds Sullivan’s requested effective rate of

$598.60 per hour is reasonable.

B. Hours Reasonably Expended

It is the fee claimant’s burden to demonstrate that the number of hours spent on

the case was “reasonably necessary” to the litigation and that counsel made “a good faith effort

to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary[.]”

Hensley v. Eckerhart, 461 U.S. 424, 434 (1983); see also Frank Music Corp. v. Metro–

Goldwyn–Mayer, Inc., 886 F.2d 1545, 1557 (9th Cir. 1989)(“Plaintiffs bear the burden of

showing the time spent and that it was reasonably necessary to the successful prosecution of their

[ ] claims.”).

Intel seeks compensation for eight hours of work performed by Ryan and 27.5

hours of work performed by Sullivan. The Court notes that unlike the typical interpleader action,

this matter was not commenced by Intel, but rather by the Estate of the Philip Cloud. Intel

explains that after it was served with the First Amended Complaint, “the parties to this dispute

indicated to the Intel Parties that the matter could be resolved through a stipulated agreement

regarding the allocation of the balances in Philip L. Cloud’s ERISA-governed plan accounts.”

Sullivan Decl., ¶ 7. Intel, therefore, “held off on filing an Interpleader so that the interested

parties could come to a negotiated resolution regarding apportionment” because a settlement

“would obviate the need for Intel to prepare, file and serve a Complaint in Interpleader.” Id. Intel

counsel researched and prepared a “complex, multi-party agreement” related to the stipulated

agreement to ensure that the “proposed allocation of retirement plan benefits [would not] violate

ERISA’s anti-alienation rules or cause the benefit plans to lose their qualified status.” Sullivan

Decl. ¶ 7. Sullivan spent 15.4 hours on these tasks and Ryan spent eight hours. Id. ¶¶ 7-8. Cloud

refused to sign the negotiated settlement agreement and Sullivan then spent 12.1 hours preparing

the Compliant in Interpleader and other tasks related to interpleader. Id.

The Court finds that the tasks engaged in by Ryan and Sullivan are the kinds of tasks for

which attorney fees are available in interpleader actions because they were “incurred in filing the

action and pursuing the plan's release from liability” rather than in “litigating the merits of the

adverse claimants' positions.” Tise, 234 F.3d at 426 (citing Schirmer Stevedoring, 306 F.2d at

194). In addition, the Court concludes that the number of hours spent researching and drafting

the proposed settlement agreement were reasonable in light of the complex nature of ERISA and

the presence of five different funds at issue in this matter. Further, the time spent preparing the

Complaint and other minimal interpleader filings in this action was reasonable.

Finally, no party has suggested that the Court should adjust the lodestar amount, and the

Court declines to do so. Accordingly, the Court awards Intel counsel attorney fees in the

requested amount of $20,297.79.

CONCLUSION

Intel’s Motion for Attorneys’ Fees, ECF 99, is GRANTED. Intel is awarded attorney fees

in the amount of $20,297.79.

IT IS SO ORDERED.

DATED:___D_e__c_e_m_b_e__r _1_, _2_0_2_3_____.

______________________________

MARCO A. HERNÁNDEZ

United States District Judge