Labor & Employment Law

SCOTUS: Attorney fees allowed in ERISA case

Hardt v. Reliance Standard Life Ins (US Supreme Ct 05/24/2010):

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 denied Reliance summary judgment, finding that because the carrier had acted on incomplete medical information, the benefits denial was not based on substantial evidence. Though also denying Hardt summary judgment, the court stated that it found "compelling evidence" in the record that she was totally disabled and that it was inclined to rule in her favor, but concluded that it would be unwise to do so without giving Reliance the chance to address the deficiencies in its approach. The court therefore remanded to Reliance, giving it 30 days to consider all the evidence and to act on Hardt?s application, or else the court would enter judgment in Hardt?s favor. Reliance did as instructed and awarded Hardt benefits. The trial court then awarded Hardt $39,149 in attorney fees. The 4th Circuit reversed, holding that (1) ERISA § 1132(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.

The US Supreme Court unanimously reversed, holding that a fee claimant need not be a "prevailing party" to be eligible for an attorney's fees award under §1132(g)(1). Section §1132(g)(1) expressly grants district courts "discretion" to award attorney?s fees "to either party." A court may award fees and costs under §1132(g)(1), as long as the fee claimant has achieved "some degree of success on the merits."

Full post as published by Ross' Employment Law Blog on May 24, 2010 (boomark / email).