Labor & Employment Law

Is only the "prevailing party" entitled to attorney fees under ERISA?

Hardt sued claiming that Reliance Standard violated the Employee Retirement Income Security Act (ERISA) by wrongfully denying her long-term disability benefits. The trial court remanded the matter to Reliance for reconsideration, and Reliance reversed its earlier decision and awarded Hardt full benefits. The trial court then awarded Hardt $39,149 in attorney fees. The 4th Circuit reversed. The US Supreme Court granted certiorari on January 15 to review the 4th Circuit judgment.

The 4th Circuit's holding was that (1) ERISA § 502(g)(1) provides a district court discretion to award attorney fees only to a prevailing party, and (2) Hardt was not a prevailing party because Hardt?s only request for relief was the award of benefits, which the district court did not award.

Case below: Hardt v. Reliance Standard Life Insurance Company (4th Cir 05/14/2009)
Official docket sheet
Certiorari granted January 15, 2010.
Oral argument: Not yet scheduled.

Question presented:

Section 502(g)(1) of the Employee Retirement Income Security Act of 1974 (ERISA) provides: "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 the action to either party." 29 U.S.C. § 1132(g)(1).

The Fourth Circuit in the decision below held that "only a prevailing party is entitled to consideration for attorneys? fees in an ERISA action," while the Second, Fifth and Eleventh Circuits have declined to read a "prevailing party" requirement into § 502(g)(1) and other circuits have issued conflicting authority. The Fourth Circuit also held that the "prevailing party" standard was not met and vacated an award of attorneys? fees to petitioner, even where the district court found "compelling evidence that [petitioner] is totally disabled," ruled that petitioner "did not get the kind of review to which she was entitled under applicable law" and remanded for a redetermination of benefits with an instruction that respondents "act on [petitioner?s] application by adequately considering all the evidence discussed within this Opinion within thirty (30) days of its date of issuance" or "judgment will be issued in favor of [petitioner]" and petitioner obtained the requested long-term disability benefits upon remand.

The questions presented are:

1. Whether the Fourth Circuit erred in holding that ERISA § 502(g)(1) provides a district court discretion to award reasonable attorney?s fees only to a prevailing party?

2. Whether a party is entitled to attorney?s fees pursuant to § 502(g)(1) when she persuades a district court that a violation of ERISA has occurred, successfully secures a judicially-ordered remand requiring a redetermination of entitlement to benefits and subsequently receives the benefits sought on remand?

Certiorari Documents:

* Petition for certiorari
* Brief in opposition
* Reply Brief for Petitioner

Counsel:

For Petitioner: John R. Ates; Ates Law Firm, P. C.; 1800 Diagonal Road, Suite 600; Alexandria, VA 22314; (703) 647-7501.

For Respondent: Joshua Bachrach; Wilson, Elser, Moskowitz, Edelman & Dicker LLP; The Curtis Center, Ste.1130 East; Independence Square West; Philadelphia, PA 19106-3308; joshua.bachrach@wilsonelser.com; (215) 606-3906.

Full post as published by Ross' Employment Law Blog on January 18, 2010 (boomark / email).