Schumacher v. AK Steel Corp. Ret. Acc. Pension Plan, 995 F. Supp. 2d 835

Background

Plaintiffs (a 92-person subgroup who signed severance releases) sued AK Steel under ERISA seeking recovery of "whipsaw" lump-sum pension benefits allegedly released by ambiguous severance waivers; the class recovered a $4.42M judgment.
Plaintiffs moved for attorneys’ fees of $1,326,000 (≈30% of the judgment), asking AK Steel to pay most under ERISA 29 U.S.C. § 1132(g)(1) and the remainder to be paid from the judgment fund.
The Court evaluated fee-shifting under ERISA (the Moon/King factors), computed a lodestar from detailed time records, and considered (but declined) a lodestar multiplier; it also considered awarding a common-fund contingent fee portion.
The Court found AK Steel culpable for soliciting releases without disclosing related West litigation and that plaintiffs’ litigation conferred a common benefit and clarified ERISA release/prejudgment-interest issues.
Rulings: the Court awarded $618,471.35 in statutory (ERISA) fees to be paid by AK Steel (the lodestar), approved a total class-counsel fee of $1,326,000 (the contingent/common-fund amount), with the balance ($707,528.70) to be paid from the judgment fund; costs taxed against AK Steel were $2,974.14; incentive award denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether fees should be awarded against AK Steel under ERISA §502(g)	AK Steel was culpable (drafted/releases; failed to disclose West); fee award would deter similar conduct and plaintiff conferred class-wide benefit	AK Steel lacked bad faith; its conduct was inartful drafting; deterrence already served by West; ability to pay alone is insufficient	Fee award under §502(g) appropriate; AK Steel culpable (not bad faith); $618,471.35 statutory fee awarded against AK Steel
Proper lodestar (hours and rates)	Counsel submitted detailed time records and market/hiring evidence supporting requested hours and out-of-district rates	AK Steel challenged excess staffing, duplicative and non‑substantive entries, and some out-of-district rates	Court reduced certain time entries (Allen and Jeffrey Engerman; some Freking & Betz entries), set reasonable hourly rates for each timekeeper, and computed lodestar of $618,471.35
Whether a lodestar multiplier is justified	Counsel sought 1.5x multiplier to reach 30% of fund, citing contingency, risk, and results	AK Steel argued Perdue requires specific proof that lodestar is inadequate; multipliers are for "rare and exceptional" cases	Multiplier denied: case not sufficiently "rare and exceptional;" lodestar alone is presumptively adequate
Whether common-fund/contingent-fee award (≈30%) is appropriate and payable from fund	Counsel and the named plaintiff had a contingent-fee agreement (25–33%); contingency and class benefit support 30% common-fund award	AK Steel opposed common-fund award and payment by defendants/class	Court approved total fee of $1,326,000 based on contingent-fee agreement and common-fund principles; statutory portion offsets that amount dollar-for-dollar so defendants pay $618,471.35 and class fund bears $707,528.70

Key Cases Cited

Moon v. Unum Provident Corp., 461 F.3d 639 (6th Cir. 2006) (factors for ERISA fee-shifting under §502(g))
Secretary of Labor v. King, 775 F.2d 666 (6th Cir. 1985) (ERISA fee-shifting factors)
Perdue v. Kenny A., 559 U.S. 542 (2010) (lodestar presumptively reasonable; burden to justify enhancement)
Venegas v. Mitchell, 495 U.S. 82 (1990) (statutory fee awards do not cap contingent-fee agreements between plaintiff and counsel)
Geier v. Sundquist, 372 F.3d 784 (6th Cir. 2004) (multiplier appropriate in rare, path‑breaking cases)
Foltice v. Guardsman Prods., Inc., 98 F.3d 933 (6th Cir. 1996) (deterrent effect of fees tied to culpability/bad faith)
Armistead v. Vernitron Corp., 944 F.2d 1287 (6th Cir. 1991) (limited deterrence where little evidence of bad faith)
Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974) (factors for fee enhancement analysis)