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Ursic v. Bethlehem Mines

decided: October 19, 1983.

WILLIAM B. URSIC, APPELLEE
v.
BETHLEHEM MINES, A SUBSIDIARY OF BETHLEHEM STEEL CORPORATION, THE PENSION PLAN OF BETHLEHEM STEEL CORPORATION AND SUBSIDIARY COMPANIES, AND D. W. KEMPKEN, PLAN ADMINISTRATOR, APPELLANTS



Appeal from the United States District Court for the Western District of Pennsylvania

Aldisert and Weis, Circuit Judges, and Re, Chief Judge.*fn*

Author: Weis

Opinion OF THE COURT

WEIS, Circuit Judge.

In this appeal we determine that the district court, 556 F. Supp. 571, properly chose to award an attorney's fee to the prevailing plaintiff in an ERISA case. However, we conclude that, although counsel was effective and competent, the nature of the factual and legal issues litigated did not justify an amount beyond the fee "lodestar" described in our precedents reviewed in this opinion.

William Ursic brought suit under section 510 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1140 (1976), to recover past and future pension benefits. He alleged that Bethlehem Mines illegally discharged him to deprive him of pension rights. After a three-day bench trial, the district court accepted the plaintiff's position and concluded that the employer had violated ERISA. Following a brief post-trial hearing, the court awarded counsel fees in the amount of $20,200.00 and expenses of $1,130.87. Defendants, including the pension plan and its administrator, appeal contending that the district court erred both in its determination on the merits and in its award of an attorney's fee.

Bethlehem terminated plaintiff, a coal mine foreman, after twenty-nine and one-half years of employment and at a time when he needed only six months to qualify for a substantial pension. The reason Bethlehem gave for the discharge was that plaintiff violated company policy by borrowing, without permission, mining tools worth about $400.00. He contended, however, that the real reason for the discharge was to prevent him from receiving his pension. Ursic's work record had been good, he had been highly regarded by his superiors, and Bethlehem had tolerated tool borrowing by company employees until shortly before this incident.

The district court's legal conclusion that Bethlehem violated ERISA followed from the factual finding that the employer's asserted reason for the discharge was pretextual, and the real reason was to prevent Ursic from drawing his pension. The finding was based on evidence that plaintiff was an excellent employee, defendants were interested in reducing their pension obligations, discharge was harsh punishment for unauthorized borrowing, and imposition of this sanction on Ursic was discriminatory.

We conclude that the findings of fact were supported by the evidence and not clearly erroneous. See Krasnov v. Dinan, 465 F.2d 1298 (3d Cir. 1972). We are also persuaded that the trial court did not err in its legal conclusions. Accordingly, we affirm the judgment on the ERISA claim.

We come to a different conclusion, however, with respect to the attorney's fee award. Defendants present us with two contentions: that the district court erred in allowing counsel fees to plaintiff, and, alternatively, that if an award is permissible, it was excessive in the circumstances here. The alternative argument does not challenge the allowance of $1,130.87 in expenses and we will not disturb that amount.

I

Section 502(g)(1) of ERISA provides that "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party," 29 U.S.C. § 1132(g)(1) (Supp. V 1981), but does not automatically mandate an award to a prevailing party. See Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1265 (5th Cir. 1980). In determining whether to make any award of fees under ERISA, courts have considered five policy factors:

(1) the offending parties' culpability or bad faith;

(2) the ability of the offending parties to satisfy an award of attorneys' fees;

(3) the deterrent effect of an award of attorneys' fees against the ...


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