Flom v. Holly Corp.

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Flom v. Holly Corp., 2008 U.S.App.LEXIS 9925 (9th Cir. 5/1/2008)(unpublished)(Issue: Attorneys’ Fees).  The plaintiff was awarded benefits after the district court remanded the initial claim to the insurer.  When Flom sought fees, though, the district court denied the request. The court of appeals reversed.

Citing an earlier ruling, the Ninth Circuit explained: “A prevailing ERISA plaintiff is entitled to attorney's fees unless special circumstances would render such an award unjust. Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589 (9th Cir. 1984).”  In determining whether the plaintiff is a prevailing party, “a prevailing party is one who achieves a judicially sanctioned and material change in the legal relationship between the parties. Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't of Health & Human Res., 532 U.S. 598, 604-05, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001).” *2.  The “judicially-sanctioned change” “need not be a judgment on the merits, and a prevailing plaintiff need not achieve directly through the judicial order itself the ultimate benefit sought. Carbonell v. I.N.S., 429 F.3d 894, 899 (9th Cir. 2005); see also Hewitt v. Helms, 482 U.S. 755, 761, 107 S. Ct. 2672, 96 L. Ed. 2d 654 (1987) ("[T]he judicial decree is not the end but the means. . . . The real value of the judicial pronouncement . . . is in the settling of some dispute which affects the behavior of the defendant towards the plaintiff).”

The court deemed an order remanding a case to the ERISA plan administrator as analogous to a remand to an administrative agency, where the remand itself provides the judicial imprimatur necessary for a party to become a prevailing party.” Williamson v. UNUM Life Ins. Co. of America, 160 F.3d 1247, 1251 (9th Cir. 1998). Even if the merits of the underlying claim remain to be decided, the remand would trigger prevailing party status under the Equal Access to Justice Act.  Rueda-Menicucci v. I.N.S., 132 F.3d 493, 495 (9th Cir. 1997); see also Li v. Keisler, 505 F.3d 913, 917-18 (9th Cir. 2007); and Johnson v. Gonzales, 416 F.3d 205, 208-10 (3rd Cir. 2005) (joining the Ninth and Seventh Circuits in concluding that an alien who prevails on a petition for review and whose case is remanded to the BIA is a "prevailing party"). *3.  In Social Security cases the same rule applies “even though the court's only action is to remand the case.” See Shalala v. Schaefer, 509 U.S. 292, 300-02, 113 S. Ct. 2625, 125 L. Ed. 2d 239 (1993).  The court added in a footnote:

Unlike in 28 U.S.C. § 2412 (d)(1)(B), the statute providing for attorney's fees in ERISA cases does not require a final judgment. 29 U.S.C. § 1132(g)(1). As a result, the lack of such a judgment here is immaterial. As explained above, the remand is sufficient to provide judicial imprimatur as required by Buckhannon.

The court then focused on the particular facts of the case and concluded:

When the district court remanded to MetLife, Flom achieved a judicially-sanctioned change in his relationship with MetLife and received "some relief" from the court on his claim. As a result of the remand, MetLife was required to allow Flom to submit additional information and to consider that information in evaluating his claim for benefits. On remand, MetLife reinstated Flom's benefits. The district court's remand provided the judicial imprimatur required by Buckhannon -- it changed Flom's legal relationship with MetLife and ultimately led to Flom's success in securing a reinstatement of benefits. As a result, Flom is a prevailing ERISA plaintiff. *5-*6.

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