Date: 06-28-2022

Case Style:

Sam Sobh v. Phoenix Graphix Incorporated

Case Number: 2:19-cv-05277-ROS

Judge: Roslyn O. Silver

Court: United States District Court for the District of Arizona (Maricopa County)

Plaintiff's Attorney:

If no lawyer is listed, call 918-582-6422 and MoreLaw will help you find a lawyer for free.

Defendant's Attorney: Heather Lee Stanton, John C. West and Daniel Paul Thiel

Description: Phoenix, Arizona employment law lawyers represented Plaintiff, who sued Defendant E.R.I.S.A. employment retirement law theory.


Sobh was an employee of Defendant Phoenix Graphix Inc. for more than ten years. While in that job, Sobh participated in a Profit Sharing Plan (“Plan”). In 2018, Sobh left his job and began seeking distribution of his Plan benefits in the form of a “hardship withdrawal.” Sobh was told he could obtain his Plan benefits through a “cash out distribution” but not a “hardship distribution.” For unknown reasons, the distinction between those two forms mattered enough to Sobh that he filed a lawsuit against Phoenix Graphix and its employees (collectively, “Defendants”) hoping to obtain a “hardship distribution.” That lawsuit was dismissed because Sobh's complaint had misidentified the relief he was seeking. Instead of amending the complaint in that suit, Sobh filed the present suit, explicitly seeking a “hardship distribution.” Before and during Sobh's first lawsuit, as well as during the present lawsuit, Defendants provided Sobh with inaccurate information regarding which version of the Plan governed his request for a distribution. Eventually, Sobh was provided the correct information that established he was not eligible for a “hardship distribution.” Despite knowing that information, Sobh continued to pursue this suit.


Sobh and Defendants both claim they are entitled to an award of fees pursuant to ERISA's fee-shifting statute, 29 U.S.C. § 1132(g)(1). That statute allows for a court “in its discretion” to “allow a reasonable attorney's fee and costs of action to either party.”


U.S.C. § 1132(g)(1). Under this language, a party that achieves “some degree of success on the merits” is eligible for an award of fees. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010). To qualify as achieving “some degree of success on the merits,” a party must do more than achieve “trivial success on the merits or a purely procedural victor[y].” Id. at 255. But not much more than that is required. “Some degree of success on the merits” merely requires a court be able to “fairly call the outcome of the litigation” favorable to one party “without conducting a lengthy inquir[y] into the question whether [the] success was substantial or occurred on a central issue.” Id.

In this case, both parties have a plausible argument they achieved “some degree of success on the merits.” Sobh established Defendants did not provide copies of ERISA plan documents in a timely manner and, as a result, Sobh was awarded a monetary penalty. That penalty, however, was a small fraction of the amount he requested. As for Defendants, they prevailed on Sobh's other ERISA claims seeking benefits under the plan and for breach of fiduciary duty. Under these circumstances, the simplest path is to assume both parties are statutorily eligible for an award of fees and assess whether either party merits an award of fees under the applicable factors. That was the approach followed by another district court faced with a similar situation of both sides having partially prevailed in an ERISA suit. See Huizinga v. Genzink Steel Supply & Welding Co., 984 F.Supp.2d 741, 745 (W.D. Mich. 2013) (recognizing both sides had some success on the merits).


“Under Rule 68, if a plaintiff rejects a defendant's offer of judgment, and the judgment finally obtained by plaintiff is not more favorable than the offer, the plaintiff must pay the costs incurred subsequent to the offer. The award is mandatory; Rule 68 leaves no room for the court's discretion.” United States v. Trident Seafoods Corp., 92 F.3d 855, 859 (9th Cir. 1996). Sobh's arguments against an award of costs were based on the erroneous assumption that the Court could, in its discretion, conclude an award of costs would be “unfair” such that costs should be denied. The Court had no such power. Because Sobh did not make any arguments that could have prevented the award of costs-such as arguing the offer of judgment was defective in some manner-Sobh's motion for reconsideration will be denied.[4]...

Outcome:
ccordingly, IT IS ORDERED the Motions for Attorneys' Fees (Doc. 92, 96) are DENIED.


IT IS FURTHER ORDERED the Motion for Sanctions and Motion for Reconsideration (Doc. 94, 103) are DENIED.

IT IS FURTHER ORDERED the Stipulation re Attorney Fees (Doc. 91) is DENIED AS MOOT.
Sobh v. Phx. Graphix (D. Ariz. 2022)

Plaintiff's Experts:

Defendant's Experts:

Comments: