# Opposition Brief — Guidry v. Sheet Metal Workers' National Pension Fund

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1995
- **Citation:** 514 U.S. 1063

## Text

No. 94-1300

IN OAS MY 660 ee Pee

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In The FEB 2 3 1995
Supreme Court of the Un ted States

V3 FICE OF THE CLE
October Term, 1994 a CLERK

CURTIS GUIDRY,

Petitioner,

SHEET METAL WORKERS’ NATIONAL PENSION
FUND; SHEET METAL WORKERS’ LOCAL UNIONS
AND COUNCILS PENSION PLAN; SHEET METAL
WORKERS’ INTERNATIONAL ASSOCIATION, LOCAL
9; SHEET METAL WORKERS’ LOCAL NO. 9
PENSION FUND, et al.,

Respondents.

4

Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit

4
BRIEF OF RESPONDENT PENSION FUNDS

IN OPPOSITION TO PETITION
FOR WRIT OF CERTIORARI

.

STEPHEN T. JOHNSON
(Counsel of Record)
JoANN L. Vocrt
ROTHGERBER, APPEL, POWERS
& JOHNSON
One Tabor Center, Suite 3000
1200 17th Street
Denver, Colorado 80202-5839
(303) 623-9000

Counsel of Record for Respondents
Sheet Metal Workers’ National Pen-
sion Fund, Sheet Metal Workers’
Local Unions and Councils Pension
Plan, and Sheet Metal Workers’ Local
No. 9 Pension Fund

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831

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TABLE OF CONTENTS

Page
SER GPE PUP IPRS 6c ces eenesdawessaepetas il
PRGRREERECE SW BEBE GPR: 6 56 6b ees hbase nn deus 1
ASEENERS CE PAIAAIINIEEN So bcs cco see ven ences noes 6
pd | rere ee Tee eer Tere TTT eee re eee 7

I. THERE ARE NO UNSETTLED PRINCIPLES
OF LAW, CONFLICTS AMONG THE CIR-
CUITS, OR OTHER “SPECIAL AND IMPOR-
TANT REASONS” FOR GRANTING
CERTIORARI REVIEW OF THE DENIAL OF
GUIDRY’S MOTION FOR ATTORNEYS’ FEES,
AN ISSUE WHICH IS OF SIGNIFICANCE
ONLY TO THE PARTIES AND WHICH IS
WHOLLY TANGENTIAL TO THE MAIN
Ere BOG. CEWURe Ste oad oh a cia dawns cow ea es 8

Il. THE DISTRICT COURT’S DENIAL OF ATTOR-
NEYS’ FEES IN THIS CASE WAS A PROPER
EXERCISE OF THE COURT’S DISCRETION,
AND WAS CONSISTENT WITH SETTLED
PRINCIPLES OF LAW APPLICABLE TO THIS

A. In Exercising their Discretion to Grant or
Deny Attorneys’ Fees in ERISA Cases,
Courts are to Consider Factors Such as the
Bad Faith of the Offending Parties, the
Potential Deterrent Effect of a Fee Award,
and the Merits of the Parties’ Positions.. 10

B. The District Court’s Denial of Attorneys’
Fees to Guidry was Appropriate Under the
Principles Outlined Above............... 13

ee el 8 | a re ne oe ee ere eer 16

TABLE OF AUTHORITIES

Page
CASES
Armistead v. Vernitron Corp., 944 F.2d 1287 (6th Cir.

PPP a kidd cdancininsnsiieseneee 31, 32, 35,
Braxton v. United States, 500 U.S. 344 (1991).......... 8
Consolidated Beef Industries, Inc. v. New York Life

Ins. Co., 949 F.2d 960 (8th Cir. 1991), cert. denied,

142 SS. CR. 1670 C0987) 6 oh ccc aes sede eee 10, 12
Custer v. Pan American Life Ins. Co., 12 F.3d 410 (4th

Cle. 9998) 6 cccsesdaesetanss ee 10, 12, 13
Davidson v. Canteen Corp., 957 F.2d 1404 (7th Cir.

SPP) cccecssevsvsuouvseausueeeeae a4, ia
Downie v. Independent Drivers Ass'n Pension Plan,

O65 F.2G 3171 (iG Cae. Tere ca ese eee 6, 10
Eaves v. Penn, 587 F.2d 453 (10th Cir. 1978)

Pee ePerrT rere rer Cry oe eee ae Rhy Be oe oe
Florence Nightingale Nursing Service, Inc. v. Blue

Cross/Blue Shield of Alabama, 41 F.3d 1476 (11th

CO FORO) io dncuwecdececansteeeeee 10, 11, 15
Freeman v. Continental Ins. Co., 996 F.2d 1116 (11th

Cis: 1990) . .2ks300iscers esse an, Ez, 33
Guidry v. Sheet Metal Workers’ National Pension

Fund, 641 F. Supp. 360 (D. Colo. 1986), aff'd, 856

F.2d 1457 (10th Cir. 1988), rev'd, 493 U.S. 365

(1990), appeal after remand, 10 F.3d 700 (10th Cir.

1993), on reh’g en banc, 39 F.3d 1078 (10th Cir.

DOOR), 6 cnccdectvneveceaseveseeeee i
Harms v. Cavenham Forest Industries, Inc., 984 F.2d 686

(5th Cir.), cert. denied, 114 S. Ct. 382 (1993)....... 12, 13

ill

TABLE OF AUTHORITIES - Continued

Page
Ironworkers Local No. 272 v. Bowen, 624 F.2d 1255
TL ok cay yir avs a4 p44 ane bo eos 11
Plumbers and Steamfitters Local No. 150 Pension
Fund v. Vertex Construction Co., 932 F.2d 1443
SS oe cee 11, 15
Quesinberry v. Life Ins. Co. of North America, 987
ee eg AR | a ea 1, hi,
Ramsey v. Colonial Life Ins. Co. of America, 12 F.3d
op Be Eee | | er 10, 11, 12, 13, 14
Rice v. Sioux City Memorial Park Cemetery, Inc., 349
re en ee Sere ee 8
Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d
Ns iatadencekevensseds 10, 11
Tiemeyer v. Community Mut. Ins. Co., 8 F.3d 1094 (6th
Cir. 1993), cert. denied, 114 S. Ct. 1371 (1994) ..... 10, 12
STATUTES AND RULES
29 USC. & 1001 ef Seq. 0... ice cece cece cc nneees 2
MON os oy saci v ne deieves ee ceceus 4
RS Rs eee 1, 6, 10
U.S. Sup. Ct. Rule 10.1 ........... eee eee eee eee eee ee, 8
U.S. Sup. Ct. Rule 15............- see e reece eee eeeeee: 1
U.S. Sup. Ct. Rule 24(1)(a), aE SS |) eres 1

i

Respondents Sheet Metal Workers’ National Pension
Fund, Sheet Metal Workers’ Local Unions and Councils
Pension Plan, and Sheet Metal Workers’ Local No. 9 Pen-
sion Fund (hereinafter collectively “Pension Funds”), by
their undersigned counsel and pursuant to U.S. Sup. Ct.
Rule 15, submit the following brief in opposition to the
Petition for Writ of Certiorari filed by Curtis Guidry. For
the reasons set forth below, this brief addresses only the
third of Guidry’s four questions presented for review,
namely:

Should Guidry be awarded his reasonable attor-
neys’ fees under ERISA, 29 U.S.C. § 1132(g), for
fees arising after this Court’s 1990 decision?

The Pension Funds accept Guidry’s statement of the
preliminary matters required by USS. Sup. Ct. Rule
24(1)(a), (b), (d), (e), and (f).

‘

STATEMENT OF THE CASE

Prior to 1981, Guidry was the chief executive officer
of Respondent Sheet Metal Workers’ International Asso-
ciation, Local 9 (hereinafter the “Union”), and a trustee of
Respondent Sheet Metal Workers’ Local No. 9 Pension
Fund.’ In 1982, Guidry pleaded guilty to embezzling
more than $377,000 from the Union. Before serving his
prison term for embezzlement, Guidry claimed benefits

' For a complete background, see Guidry v. Sheet Metal
Workers’ National Pension Fund, 641 F. Supp. 360 (D. Colo. 1986),
aff'd, 856 F.2d 1457 (10th Cir. 1988), rev'd, 493 U.S. 365 (1990),
appeal after remand, 10 F.3d 700 (10th Cir. 1993), on reh’g en banc,
39 F.3d 1078 (10th Cir. 1994).

from the three Pension Funds. After the Pension Funds
denied Guidry’s claims for benefits on the grounds thai
he had forfeited the right to his pensions because of
criminal misconduct against the Union, Guidry filed suit
in the U.S. District Court for the District of Colorado
pursuant to the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”).

The Union intervened in the litigation and filed
claims against Guidry for recovery of the embezzled
funds. In the course of the litigation, Guidry and the
Union stipulated to the entry of a $275,000 judgment in
the Union’s favor and against Guidry. They agreed to
litigate the availability of the constructive trust remedy
requested by the Union.

The district court rejected the Pension Funds’ claim
that Guidry had forfeited his right to benefits; however, it
concluded that ERISA did not preclude the imposition of
a constructive trust over those funds in favor of the
Union. 641 F. Supp. at 363. The district court judgment
was affirmed by the U.S. Court of Appeals for the Tenth
Circuit. 856 F.2d 1457 (10th Cir. 1988). This Court
reversed, 493 U.S. 365 (1990), holding that ERISA’s pre-
clusion against the alienation of pension benefits pre-
cluded placing a constructive trust on Guidry’s pension
benefits. 493 U.S. at 375-76.

After this Court’s decision, Guidry moved for reim-
bursement of his attorneys’ fees expended in the litiga-
tion. The district court denied that request as to both the
Union and the Pension Funds. It held that the litigation
between Guidry and the Union did not arise under
ERISA, so that the Union could not be subjected to

ERISA’s provision regarding attorneys’ fees. As to both
the Union and the Pension Funds, the court ruled that
Guidry was not entitled to an award of fees under the
guidelines for recovery of fees in ERISA cases set forth in
Eaves v. Penn, 587 F.2d 453 (10th Cir. 1978). Guidry did not
appeal the district court’s denial of fees.

In accordance with this Court’s remand, on February
28, 1991, the district court entered judgment ordering the
Pension Funds to pay past and future pension benefits to
Guidry. At the same time, the Union made efforts to
satisfy its $275,000 judgment against Guidry from those
pension payments. The Union registered its judgment
against Guidry in the U.S. District Court in Houston,
Texas, where Guidry resided. When the Pension Funds
tendered some $190,000 to Guidry at his home in Texas,
in satisfaction of the award of back pension benefits, the
funds were immediately seized by a U.S. Marshal and
deposited into the registry of the Texas court. See Guidry
Appendix, A-74. The Union also made efforts to collect its
judgment through garnishments on a Denver bank
account established by Guidry, into which the Pension
Funds were to deposit his future monthly pension
amounts as they became due.

These activities gave rise to post-judgment proceed-
ings in the U.S. District Courts in Colorado and in the
Southern District of Texas. On August 23, 1991, the par-
ties stipulated that the money in the court registry in
Texas would be transferred to the Denver bank account
which was the subject of the Union’s garnishment efforts,
and that past and future pension payments would be
deposited into that account and be subject to the Union's
initial garnishment. Guidry Appendix, A-76 to A-80.

On January 8, 1992, the district court in Colorado
entered its Findings, Conclusions and Order on Post-
Judgment Issues (Guidry Appendix, A-66 to A-71). The
court concluded that the ERISA exemption from garnish-
ment, 29 U.S.C. § 1056(d)(1), applied to the payments
made by the Pension Funds into the Guidry account, and
noted that its conclusion was “mandated by the law of
this case” as announced by this Court in its 1990 decision.
Guidry Appendix, A-69. It further concluded that the
Pension Funds’ attempt to satisfy the judgment against
them by the tender made in Texas was not legally effec-
tive; that the Pension Funds and the Union had not
violated any order of the court and had not acted in
contempt of court; and that neither the Texas exemption
statute nor the Colorado exemption statute applied to the
case.

The district court also denied Guidry’s motion for
recovery of his attorneys’ fees and costs incurred subse-
quent to the district court’s February 28, 1991, judgment
in his favor. Guidry had argued that an award of fees was
now appropriate even though the court had previously
denied such an award, because the Union and the Pen-
sion Funds had shown “an obstinate and unbending atti-
tude” toward this Court’s decision and had conspired to
continue to deprive him of his pensions. The district
court rejected the argument, noting that the post-judg-
ment dispute went beyond the initial action to recover
plan benefits, and involved “both the plaintiff’s claim of
exemption under ERISA and the Union’s efforts to collect
on its judgment.” Guidry Appendix, A-70. The court con-
cluded that the attempted tender and seizure of funds in
Texas was not forum shopping or misconduct by the

parties or by counsel, but instead constituted “diligent
efforts” to avoid injustice. Although it had ruled those
efforts invalid, the court declined to “add to the inequity
by awarding attorney’s fees.” Id.

A three-member panel of the U.S. Court of Appeals
for the Tenth Circuit, with one dissent, reversed the dis-
trict court on the garnishment issue, concluding that the
ERISA anti-alienation provision did not protect funds
paid to and received by Guidry. 10 F.3d at 710. It also held
that exemptions from garnishment provided by Colorado
law were preempted by ERISA. Id. at 713. As to Guidry’s
cross-appeal of the district court’s denial of his motion
for attorneys’ fees, the panel noted simply that “[b]ecause
he is not the prevailing party, this issue is moot.” Id. at
716.

Upon rehearing en banc, the Tenth Circuit agreed
with the panel that ERISA’s anti-alienation provision did
not apply to protect Guidry’s pension funds from gar-
nishment once they were paid to and received by him. 39
F.3d at 1083. However, it reversed the panel on the issue
of ERISA’s preemption of state garnishment laws, and
held that the funds were exempt from garnishment to the
extent provided by Colorado law - i.e., 75 percent. Id. at
1083-84. The Tenth Circuit’s decision on the attorneys’
fees issue is set forth in a single footnote at the end of the
majority opinion:

In his original appeal, Mr. Guidry claimed that
the district court abused its discretion in deny-
ing his request for attorneys fees. On rehearing,
Mr. Guidry made specific arguments and also
requested a rehearing on all other issues within

the panel opinion, although he did not speci-
fically reassert his earlier argument on the fee
issue. Assuming that the issue is properly before
the en banc court, we find no grounds for
reversing the district court’s ruling that Mr. Gui-
dry was not entitled to a fee award under the
ERISA fee-shifting provision, 29 U.S.C.
§ 1132(g). See Downie v. Independent Drivers Ass'n
Pension Plan, 945 F.2d 1171, 1172 (10th Cir. 1991)
(district court decision on a fee award under
section 1132(g) reviewed for abuse of discre-
tion).

Id. at 1087, n.11.

SUMMARY OF ARGUMENT

Regardless of this Court’s decision on the other
issues raised in Guidry’s Petition for Writ of Certiorari,
the Court should deny certiorari on Guidry’s third ques-
tion presented for review (relating to the denial of his
motion for attorneys’ fees), the only issue which still
involves the Pension Funds.

The attorneys’ fees issue is entirely tangential to the
main questions raised in this case, and was barely
touched upon by the courts below. It is an issue of iso-
lated significance, not of public importance. The issue
does not involve any conflict among the circuits or unset-
tled question of law that needs to be resolved by this
Court.

The law regarding attorneys’ fee awards in ERISA
cases is well settled, and was properly applied by the
lower courts in this case. ERISA commits the decision on

attorneys’ fees to the sound discretion of the district
court. The cases have identified factors which are to
guide courts in the exercise of this discretion. Application
of those factors in this case supports the district court’s
denial of fees.

As the district court found, the parties against whom
fees were sought in this case did not act in bad faith, and
had a legitimate legal basis for their position. The unique
circumstances of this case significantly lessen any poten-
tial deterrent effect from an attorneys’ fees award, and
likewise lessen the amount of “benefit,” if any, to other
plan participants from the decision in Guidry’s favor.
Moreover, it was not improper for the district court to
take Guidry’s criminal conduct into account in denying
his motion for fees.

Because there are no “special and important reasons”
for granting review of this issue, and because the district
court’s exercise of its discretion in denying fees was
consistent with settled principles of law applicable to the
issue, certiorari should be denied.

*

ARGUMENT

Although the Union and Guidry have continued to
litigate the legality of garnishment of pension funds sub-
sequent to this Court’s first opinion, the Pension Funds
effectively withdrew from the litigation upon the parties’
August 23, 1991, stipulation providing that all monies
owed by the Pension Funds to Guidry would be paid into
Guidry’s Denver bank account. Guidry Appendix, A-76
to A-80. The Pension Funds’ involvement in the case

since then has been limited to opposition to Guidry’s
request for attorneys’ fees, which were sought both from
the Pension Funds and from the Union. In this brief, the
Pension Funds address only the attorneys’ fees issue
(question three in Guidry’s Petition), and take no position
on the other questions presented for review.

As to attorneys’ fees, the Pension Funds believe that
certiorari review of this issue should be denied regardless
of this Court’s determination of the other issues raised in
Guidry’s petition.

I. THERE ARE NO UNSETTLED PRINCIPLES OF
LAW, CONFLICTS AMONG THE CIRCUITS, OR
OTHER “SPECIAL AND IMPORTANT REASONS”
FOR GRANTING CERTIORARI REVIEW OF THE
DENIAL OF GUIDRY’S MOTION FOR ATTOR-
NEYS’ FEES, AN ISSUE WHICH IS OF SIGNIFI-
CANCE ONLY TO THE PARTIES AND WHICH IS
WHOLLY TANGENTIAL TO THE MAIN ISSUES IN
THIS CASE.

A petition for a writ of certiorari will be granted only
when there are “special and important reasons therefor.”
U.S. Sup. Ct. Rule 10.1. Such reasons may include, for
example, resolution of a conflict among the circuit courts

of appeals or state courts of last resort concerning the
meaning of a provision of federal law. Braxton v. United
States, 500 U.S. 344, 347 (1991). This Court has stated in
the past that certiorari review is not appropriate on issues
which are of “isolated significance” and not of public
importance. Rice v. Sioux City Memorial Park Cemetery, Inc.,
349 U.S. 70, 76-77 (1955).

Under these standards, certiorari should be denied
on Guidry’s attorneys’ fees issue. This issue is wholly
tangential to the main issues in this case, and was barely
touched upon by the courts below. Whatever “nationwide
significance” the other issues in Guidry’s Petition may
have, the attorneys’ fee issue has no such significance.
Neither Guidry nor any of the lower courts has identified
any dispute over the tests or other legal principles appli-
cable to a determination of this issue, or any conflict
among the circuits that needs to be resolved by this
Court. Moreover, including the attorneys’ fees issue in
any grant of certiorari in this case would involve parties
(the Pension Funds) whose liability, except for attorneys’
fees, has been long since resolved, and who are otherwise
not directly affected by whatever decision is reached on
the remaining issues.

II. THE DISTRICT COURT’S DENIAL OF ATTOR-
NEYS’ FEES IN THIS CASE WAS A PROPER
EXERCISE OF THE COURT’S DISCRETION, AND
WAS CONSISTENT WITH SETTLED PRINCIPLES
OF LAW APPLICABLE TO THIS ISSUE.

Certiorari should be denied because the attorneys’
fees issue was properly resolved by the courts below.
ERISA by its terms commits the decision whether to
award attorneys’ fees to the sound discretion of the dis-
trict court. The district court’s decision to deny fees in
this case was a proper exercise of that discretion, and is
consistent with conclusions reached by other courts
applying well-established tests for deciding whether to
award fees. The Tenth Circuit properly limited its review
to determining whether there were grounds for finding

10

an abuse of discretion. There is no basis for further
review of the issue by this Court.

A. In Exercising their Discretion to Grant or Deny
Attorneys’ Fees in ERISA Cases, Courts are to
Consider Factors Such as the Bad Faith of the
Offending Parties, the Potential Deterrent
Effect of a Fee Award, and the Merits of the
Parties’ Positions.

The award of attorneys’ fees in this case is governed
by ERISA § 502(g)(1) (29 U.S.C. § 1132(g)(1)), which pro-
vides in pertinent part:

In any action under this subchapter .. . by a
participant, beneficiary, or fiduciary, the court in
its discretion may allow a reasonable attorney’s
fee and costs of action to either party.

Consistent with the language of the statute, the courts
have recognized that an award of attorneys’ fees in
ERISA cases is committed to the sound discretion of the
district court, and is reviewable on appeal only for abuse
of discretion. E.g., Custer v. Pan American Life Ins. Co., 12
F.3d 410, 422 (4th Cir. 1993); Ramsey v. Colonial Life Ins. Co.
of America, 12 F.3d 472, 480 (5th Cir. 1994); Tiemeyer v.
Community Mut. Ins. Co., 8 F.3d 1094, 1102 (6th Cir. 1993),
cert. denied, 114 S. Ct. 1371 (1994); Consolidated Beef Indus-
tries, Inc. v. New York Life Ins. Co., 949 F.2d 960, 966 (8th
Cir. 1991), cert. denied, 112 S. Ct. 1670 (1992); Downie v.
Independent Drivers Ass'n Pension Plan, 945 F.2d 1171, 1172
(10th Cir. 1991); Florence Nightingale Nursing Service, Inc.
v. Blue Cross/Blue Shield of Alabama, 41 F.3d 1476, 1485
(11th Cir. 1995).

11

Unlike the mandatory-fee shifting provisions of some
statutes, a fee award is not required in ERISA cases even
when one party prevails on the merits. Quesinberry v. Life
Ins. Co. of North America, 987 F.2d 1017, 1030 (4th Cir.
1993); Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d
382, 387 (9th Cir. 1994); Freeman v. Continental Ins. Co., 996
F.2d 1116, 1119 (11th Cir. 1993).

In assessing whether to award fees, many courts have
adopted the five-factor test first announced by the Tenth
Circuit in Eaves v. Penn, 587 F.2d 453 (10th Cir. 1978). That
test directs the courts to consider:

(1) The degree of the offending parties’ cul-
pability or bad faith;

(2) The degree of the ability of the offending
parties to personally satisfy an award of
attorneys’ fees;

(3) Whether or not an award of attorneys fees
against the offending parties would deter
other persons acting under similar circum-
stances;

(4) The amount of benefit conferred on mem-
bers of the pension plan as a whole; and

(5) The relative merits of the parties’ position.

Id. at 465. See also Quesinberry, 987 F.2d at 1029; Ramsey, 12
F.3d at 480; Armistead v. Vernitron Corp., 944 F.2d 1287,
1303 (6th Cir. 1991); Saltarelli, 35 F.3d at 388; Florence
Nightingale, 41 F.3d at 1485. No one factor is decisive, and
the courts may consider other factors in addition to the
five enumerated here. Plumbers and Steamfitters Local No.
150 Pension Fund v. Vertex Construction Co., 932 F.2d 1443,
1453 (11th Cir. 1991) (citing Ironworkers Local No. 272 v.

12

Bowen, 624 F.2d 1255, 1266 (5th Cir. 1980), for the proposi-
tion that “[n]o one of these factors is necessarily decisive,
and some may not be apropos in a given case, but
together they are the nuclei of concerns that a court
should address. .. . In particular types of cases, or in any
individual case, however, other considerations may be
relevant as well”); Quesinberry, 987 F.2d at 1029; Armi-
stead, 944 F.2d at 1304.

Attorneys’ fees may be denied under this test even if
one or more factors would support an award of fees. See
Ramsey, 12 F.3d at 480 (no abuse of discretion in denying
fees, even though defendant could afford to pay the
attorneys’ fee award); Tiemeyer, 8 F.3d at 1102 (same);
Davidson v. Canteen Corp., 957 F.2d 1404, 1409 (7th Cir.
1992) (denial of fees to plaintiffs not an abuse of discre-
tion even though factors two and three of five-factor test
weighed in plaintiffs’ favor).

As to the first of the five Eaves factors, courts have
been particularly willing to uphold denials of attorneys’
fees where there has been no illegal or bad faith conduct
on the part of the party against whom fees were sought.
See Custer, 12 F.3d at 423; Ramsey, 12 F.3d at 480; Harms v.
Cavenham Forest Industries, Inc., 984 F.2d 686, 694 (5th
Cir.), cert. denied, 114 S. Ct. 382 (1993); Davidson, 957 F.2d
at 1410; Freeman, 996 F.2d at 1120. Similarly, denial of fees
is appropriate where there was a legitimate legal basis for
the position taken by the party against whom the fees
were sought (Eaves factor five). Custer, 12 F.3d at 423;
Ramsey, 12 F.3d at 480; Harms, 984 F.2d at 694; Tiemeyer, 8
F.3d at 1102; Consolidated Beef Industries, 949 F.2d at 966
(8th Cir. 1991) (CBE’s claims were “serious and involved
complicated legal issues that were sufficiently debatable

—V3—V—nar

13

to justify plaintiff’s pursuit of the claims”); Freeman, 996
F.2d at 1120.

In applying the other factors, courts have upheld
denials of fees where the fee award would be unlikely to
deter others (factor three), and where the successful party
did not vindicate the rights of any other plan participants
or benefit other persons (factor four). See Custer, 12 F.3d
at 423; Harms, 984 F.2d at 694; Davidson, 957 F.2d at 1410;
Freeman, 996 F.2d at 1120. Deterrent effect and benefit to
others are often found to be lacking in cases involving
unique circumstances. In Ramsey, for example, the appel-
late court upheld the district court’s finding that the
“uniqueness of the circumstances greatly diminished the
deterrent effect of the ruling” and that “Ramsey’s suit
had no applicability to other ERISA participants.” 12 F.3d
at 480.

B. The District Court’s Denial of Attorneys’ Fees
to Guidry was Appropriate Under the Prin-
ciples Outlined Above.

The district court’s denial of attorneys’ fees to Guidry
in this case was a proper exercise of its discretion, and
was entirely consistent with the general principles set
forth above. The mere fact that this Court had previously
ruled that the Pension Funds were required to pay Gui-
dry’s pension did not make the parties’ subsequent
attempts to satisfy the Union’s judgment out of those
funds into misconduct or bad faith — as the district court
recognized. Guidry Appendix, A-70. Moreover, as the
district court stated in its Memorandum Opinion and

14

Order denying Guidry’s previous motion for fees,? an
award of attorneys’ fees to Guidry would not deter simi-
lar conduct by similar defendants in the future, given the
uniqueness of the case and the small likelihood that the
precise issue would arise in the future. See Ramsey, 12
F.3d at 480. Similarly, although Guidry’s ultimate victory
on the constructive trust issue might have conferred a
theoretical benefit on other embezzlers or similarly situ-
ated plan participants, that limited benefit should not
outweigh factors counseling strongly against an award of
fees under the unusual facts of this case.

As to the “relative merits of the parties’ positions,” it
should be remembered that the dispute between Guidry
and the Pension Funds (as distinguished from the dispute
between Guidry and the Union) was over the efficacy of

2 In its (unpublished) Memorandum Opinion and Order of
December 31, 1990, the district court undertook a detailed anal-
ysis of the merits of Guidry’s first attorneys’ fee claim under the
Eaves five-factor test. It found that the parties against whom fees
were sought had not acted in bad faith, and that their arguments
had been persuasive to the district court and to the court of
appeals even though Guidry ultimately prevailed in this Court.
It further found that the ability of the defendants to satisfy the
judgment need not be addressed because the other factors sup-
ported a denial of a fee award; that awarding fees to Guidry
would not deter similar conduct from similar defendants in the
future under the unique circumstances of the case; that any
benefits to other parties from Guidry’s victory were insignifi-
cant under the unusual facts of the case; and that although
Guidry ultimately prevailed on the merits, the defendants’ posi-
tion was reasonable and responsible. The court also stated that,
while it was not to adopt a punitive attitude against Guidry, his
criminal conduct was an appropriate factor to consider in deter-
mining whether to award fees.

15

the Pension Funds’ tender of benefits in Texas. Although
that tender was found later to have been ineffective, no
court found it to have been illegal or otherwise so lacking
in merit as to be punishable by an attorneys’ fee award.
Moreover, following that attempted tender, the Pension
Funds complied with Guidry’s request to transfer the
moneys at issue to his Colorado bank account; and they
did so pursuant to an August 1991 stipulation, long
before the district court ruled on the issue.

Finally, as noted above, courts may properly consider
other factors as well as the five enumerated Eaves factors
in deciding whether to award fees. The district court
appears to have taken into account Guidry’s criminal
conduct in deciding that the equities did not support an
award of fees. Guidry Appendix, A-70. Contrary to Gui-
dry’s argument to this Court, it was not inappropriate for
the district court to have done so. See Plumbers and Steam-
fitters Local No. 150 Pension Fund, 932 F.2d at 1453.

All these factors, taken together, amply support the
district court’s decision to deny fees to Guidry. Although
the district court did not articulate all five of the Eaves
factors in its second attorneys’ fees ruling (as it had done
in the first), that fact does not somehow require reversal
of its determination. See Florence Nightingale, 41 F.3d at
1485 (upholding district court’s denial of fees even
though court focused only on one factor, the degree of the
offending party’s bad faith); Plumbers and Steamfitters
Local No. 150 Pension Fund, 932 F.2d at 1453 (no abuse of
discretion, even though district court considered only
first and fifth factors of Eaves test); Armistead, 944 F.2d at
1304 (no remand necessary to require court to consider
factors two through five of test, where such consideration

16

would not lead to a different result). The fact that the
district court had gone through the five-factor Eaves anal-
ysis in detail when it denied Guidry’s initial motion for
fees (see n. 2, above) demonstrates that the court was
familiar with the test. As in Armistead, nothing would be
served by remanding this issue to the district court for a
renewed articulation of the Eaves test, when such articula-
tion would clearly not lead to a different result.

In his Petition, Guidry argues in regard to the attor-
neys’ fee issue that “since the congressional purpose is
that actual pension benefits be received, Guidry should
be awarded his statutory reasonable attorney fees under
ERISA ...” (Petition, p. 13). This argument is illogical. It
is undisputed that, in accordance with this Court’s pre-
vious opinion, Guidry is receiving his pension benefits. It
does not follow that anyone receiving pension benefits is
also entitled to an award of attorneys’ fees under ERISA.
Congress could have included such a provision in ERISA,
but it did not. Instead, the statute simply leaves the
award of fees to the discretion of the court.

The district court’s exercise of its discretion was
appropriate under the unique circumstances of this case,
and should not be disturbed by this Court.

+

CONCLUSION

There are no “special and important reasons” for
granting certiorari review of the denial of Guidry’s
request for attorneys’ fees. The district court’s ruling on
fees was entirely consistent with well-established princi-
ples of law applicable to this issue. The Pension Funds

|

17

accordingly respectfully request that, regardless of this
Court’s resolution of the remaining issues, it deny Gui-
dry’s Petition to the extent that it seeks review of the
district court’s denial of his motion for attorneys’ fees.

Respectfully submitted this 28th day of February,
1995.

STEPHEN T. JOHNSON
(Counsel of Record)
JOANN L. Voct
ROTHGERBER, APPEL,
Powers & JOHNSON
One Tabor Center, Suite 3000
1200 17th Street
Denver, Colorado 80202-5839
(303) 623-9000

Counsel of Record for Respondents
Sheet Metal Workers’ National Pen-
sion Fund, Sheet Metal Workers’
Local Unions and Councils Pension
Plan, and Sheet Metal Workers’ Local
No. 9 Pension Fund

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1216%3A2. Public record. Not legal advice.