20 January 2010
Section 502(g)(1) of the Employee Retirement Income Security Act of 1974 (ERISA) provides that “[i]n 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). Although the statute does not expressly require that the party seeking a fee award be a “prevailing party,” as is required by several other fee-shifting statutes, the courts of appeals have divided over whether ERISA incorporates a prevailing party requirement. On January 15, 2010, the Supreme Court granted certiorari in Hardt v. Reliance Standard Life Insurance Co., No. 09-448, to determine (1) whether eligibility for attorney’s fees under ERISA is limited to those who qualify as prevailing parties, and (2) whether an ERISA plaintiff is entitled to prevailing party status following a court-ordered redetermination of benefits that results in the requested benefits being granted.
Given the direct costs incurred when attorney’s fees are awarded, and the potential incentive to litigate created by the availability of such awards, this case is important to all businesses that maintain ERISA plans and face litigation over disability or retirement benefits.
In the decision below, the Fourth Circuit vacated an award of attorney’s fees to plaintiff Hardt because she did not meet the requirements for prevailing party status. To qualify as a prevailing party, “a plaintiff [must] receive at least some relief on the merits of his claim.” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 603 (2001). After Hardt was diagnosed with carpal-tunnel syndrome and small-fiber neuropathy, she filed a claim for long-term disability benefits from respondent Reliance Standard Life Insurance Company (“Reliance”), the underwriter for her disability insurance plan. After Reliance denied her claim, Hardt filed a complaint in the district court alleging an ERISA violation from the wrongful denial of her claim. The district court concluded that the denial of Hardt’s claim was not based on substantial evidence and remanded the claim to Reliance for reconsideration, and Reliance eventually agreed to pay the benefits Hardt had requested. Hardt then moved for attorney’s fees, but the Fourth Circuit ruled that she was not a prevailing party under the Buckhannon standard because the district court’s remand order did not itself award any benefits and did not constitute “an enforceable judgment on the merits.”
Absent extensions, amicus briefs in support of the petitioner will be due on March 4, 2010, and amicus briefs in support of the respondent will be due on April 1, 2010.
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