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Is a court remand sufficient for a fee award?

In ERISA litigation, the availability of an attorney fee award pursuant to 29 U.S.C. Sec. 1132(g) gives an incentive to attorneys to take on such difficult cases.  But what happens if a court fails to decide the matter, but instead, remands the case to reconsider the issues presented. In Gross v. Sun Life Assur.Co. of Canada, 2014 WL 3954030, 2014 U.S.App.LEXIS 15617 (1st Cir. August 14, 2014), the court firmly held that fees are due for remands even if no benefits are recovered.

 

Following the issuance of a ruling overturning a denial of benefits and remanding the matter for further proceedings (Gross v. Sun Life Assur.Co. of Can., 734 F.3d 1 (1st Cir. 2013)), the court issued a comprehensive ruling finding the plaintiff was entitled to fees.  The plaintiff maintained an entitlement to fees after meeting the standard set forth in Hardt v. Reliance Standard Life Ins.Co., 560 U.S. 242 (2010) - achievement of "some degree of success on the merits."  The court agreed, finding the prior decision "afforded Gross a degree of success on the merits that qualifies her for an award of fees. Further, we find that such an award is both appropriate and properly ordered at this time."

The court pointed out that the plaintiff was successful in the earlier proceeding in persuading the court to reverse the lower court's finding that the plan language triggered the de novo, rather than the arbitrary and capricious standard of review, which it deemed a significant victory.  

 

The court catalogued the majority of rulings that followed Hardt which held that a remand to the plan administrator, "even without guidance favoring an award of benefits or an actual grant of benefits, is sufficient success on the merits to establish eligibility for fees under section 1132(g)(1)."  The court added that the rationale for fee awards following a remand as constituting some "success" is based on "(1) a finding that the administrative assessment of the claim was in some way deficient, and (2) the plaintiff's renewed opportunity to obtain benefits or compensation."  The court added that to classify winning a remand "as a minimal or "purely procedural victory" mistakes its importance."  Thus, even if no benefits are awarded, and despite the fact that permitting fee awards before a final resolution could "balkanize" fee litigation, the court determined that a fee award was due without awaiting the outcome of the remand.

 

A dissent was filed by Judge Bruce Selya.

 

 

While it is surprising that the Court of Appeals wrote such an extensive decision on a fee dispute, the fact that one of the U.S. Courts of Appeals made it clear in a published opinion that fees are recoverable for remands is of critical help to claimants and their representatives.  Making the point even stronger by addressing every issue raised in a dissenting opinion reinforces the holding and obviates the need for any other court to rule on this issue.  

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