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ERISA Litigation Attorney | Lane Powell Law Firm

ERISA: Plaintiff’s Attorney Fees Denied — Filing Of Lawsuit Was Not Reason Why Benefits Were Granted

Posted in ERISA

You already know that in ERISA cases a court may, in its discretion, award attorney fees if a party achieved “some degree of success on the merits.”

Is the mere filing of a lawsuit,  before Plaintiff’s ERISA-governed disability benefit claim is granted, sufficient to win an award attorney fees?  NO.

Here’s the case of Koloff v. MetLife Ins. Co, 2014 WL 3420990 (E. D. Cal. July 14, 2014) [PDF].

FACTS: Koloff brought suit seeking disability benefits under an ERISA-governed plan. The Court dismissed the case (without prejudice) because Koloff had failed to exhaust administrative remedies. On December 5, 2013, MetLife informed Plaintiff’s counsel it was sending payment on benefits and asked for information to the net amounts, because of the offset for Social Security benefits. On December 17, 2013, Koloff brought a second lawsuit seeking disability benefits. On December 20, 2013, MetLife sent Koloff the letter approving her disability claim.

Koloff then moved for attorney fees, contending she achieved “some success on the merits.”

DISTRICT COURT HELDPlaintiff’s Motion for Attorney Fees Denied.

  1. The Plaintiff’s attorney’s time records strongly suggest that “he knew of MetLife’s intention to approve the claim prior to the filing of the complaint on December 17, 2013….”  The administrative record corroborates this, noting the December 5, 2013 conversation in which MetLife advised that it was “getting a check out.”  Op. at 7.
  2. “[T]he Court finds MetLife made the decision to approve plaintiff’s long term disability benefits by December 5, 2013 and, more importantly, made clear to plaintiff’s counsel that the only thing to do was determine the net amount to be paid which would occur once counsel provided MetLife the SSDI and EDD [offset] figures.”  Op. at 8.
  3. “Because there was no dispute as to the merits of the action before the complaint was filed, Plaintiff has shown no “injury in fact.”  Op. at 8-9.
  4. Under ERISA, “fees and costs may be awarded to any party ‘who has achieved some degree of success on the merits.’”  A claimant “does not satisfy that requirement by achieving ‘trivial success on the merits’ or a ‘purely procedural victory[.]’”  Op. at 10.
  5. Plaintiff’s counsel should not get attorney fees in her first lawsuit, which was dismissed without prejudice. “[W]hen an individual fails to exhaust administrative remedies, ‘the proper remedy is dismissal without prejudice.’” The dismissal here was not analogous to a remand.  Op. at 10.
  6. “[F]ees expended during administrative processes are not recoverable.”  Op. at 12, Fn. 13
  7. “T]he Ninth Circuit has not yet determined whether the catalyst theory [for seeking attorney fees] is viable in an ERISA action in light of Buckhannon[.]”  Op. at 12.
  8. [T]he facts do not demonstrate that the suit was [a catalyst] or linked to the decision to approve plaintiff’s benefits….Plaintiff’s counsel was informed that benefits would be paid before the litigation was initiated.”  Op. at 13-14.

ERISA ATTORNEY FEES – 1st Circuit: Court Remand to Claims Administrator “because the record is insufficient for de novo review” is “sufficient success on the merits” to Award Attorney Fees?

Posted in ERISA

You have seen this issue before:  The court remands the ERISA-governed long term disability claim for further consideration by the claims administrator because the administrative record was insufficient for de novo review.

Is a court’s remand for further review of an ERISA-governed claim by the claims administrator a sufficient “degree of success on the merits” to qualify for an award of attorney fees and costs?

Is merely “surviving to fight another day” the same as winning the war or winning a significant battle?   Maybe so.

Here’s the case of Gross v. Sun Life Assurance Company of Canada, __ F.3d __ (1st Cir. Slip. Op. August 14, 2014) (PDF).

You should read this opinion, and the dissenting opinion, because it outlines arguments (and cites the cases nationally) on both sides of the issue…

FACTS:  Gross, age 34, claimed fibromyalgia disabled her and she sought long term disability benefits.  The claim was denied based in part on surveillance.  The court held that de novo review applied, but remanded to the claims administrator because the administrative record was insufficient for de novo review. Plaintiff’s counsel sought $261,000+ in fees and costs.

FIRST CIRCUIT HELD:  (Split decision with dissenting opinion)

  1. “Under ERISA, a court ‘in its discretion may allow a reasonable attorney’s fee and costs to either party’ in a benefits proceeding.  Op. at 5.
  2. To obtain fees the fee-seeker does not have to show she is a “prevailing party, but only that the ‘claimant show[] some degree of success on the merits.’”  Op. at 5.
  3. The United States Supreme Court “declined…to decide ‘whether a remand order, without more, constitutes some degree of success on the merits’ sufficient to make a party eligible for attorney fees under [ERISA].’”  Op. a 6.
  4. “Most courts…have held that a remand to the plan administrator…is sufficient success on the merits to establish eligibility for fees….”  Op. at 7-8 (Cases cited).
  5. Some federal districts courts in Colorado, Michigan, Florida have held remand does not justify fees because remand is “a purely procedural victory” and claimant has yet to achieve any “degree of success on the merits.”  Op. at 8-9 (Cases cited).
  6. “A remand to the claims administrator for reconsideration of benefits entitlement ordinarily will reflect the court’s judgment that the plaintiff’s claim is sufficiently meritorious that it must be reevaluated fairly and fully.”  Op. at 10.
  7. The Court rejected Sun Life’s argument that an award of some amount of benefits is necessary to establish “some degree of success.”  Op. at 10-11.
  8. DISSENT: Remands alone are insufficient “success” to award fees because: “Surviving to fight another day is not the same as winning the war (or even the same as winning a significant battle).” Op. at 31.
  9. DISSENT: “[T]he merits issue in this case is whether the plaintiff is entitled to benefits (and, if so, to what extent).  As long as the plaintiff secures some benefits as a result of litigation, she will be eligible for a fee award. At [remand], however, the benefits claim is entirely up in the air.  We simply do not know whether her claim will prove to be successful in whole, in part, or not at all.“  Op. at 32. (Emph. added).

ERISA: 6th Circuit — Benefit Denial Letters: Include The Time Limit For Judicial Review Or Lose Contractual Limitations Defense

Posted in ERISA

Does your ERISA claim benefit denial letter preserve the contractual limitations defense?

If your denial letter fails to expressly state the contractual limitations timeframe, it might not preserve that defense. 

Here’s the case of Moyer v. Met Life Ins. Co., __ F.3d __ (6th Cir. August 7 2014)(2-1 decision).

FACTS. Moyer made a claim in 2005 for disability under an ERISA-governed Long Term Disability Plan. The plan had a contractual limitation provision which states: “[n]o lawsuit may be started more than 3 years after the time proof [of a claim] must be given.” Met Life initially approved the claim. In 2007, Met Life determined Moyer could perform work in “any occupation.” Met Life denied the appeal on June 20, 2008. The denial letter included notice of the right to judicial review, but did not expressly state that a three year contractual time limit applied. Moyer sued Met Life on February 20, 2012.

DISTRICT COURT HELD:  Case dismissed because the plan contained a three-year limitations period for filing suit. The Plan provided constructive notice of the time limit.


  1. 29 C.F.R. Section 2560.503-1 requires ERISA-governed denial letters to provide “the time limits applicable to [the plan’s review procedures], including a statement of the claimant’s right to bring a civil action….” Op. at 4 (Emphasis in original).
  2. The applicable time limits for bringing a civil action “must be provided” in the benefit determination letter.  Id.
  3. The “failure to include the judicial review time limits in the adverse benefit determination letter renders the letter not in substantial compliance with [ERISA] Section 1133.”  Op. at 5.
  4. DISSENT.  “Ample authority counsels against the majority’s approach.” Dissent at 8.
  5. DISSENT. “[C]ourts elsewhere split on whether the regulation requires a claim-denial letter to inform a plan participant of both their right to bring a civil action and the action’s limitations period. [T]he purpose of Section 1133 is limited to assuring review by the plan fiduciary.” Dissent at 9 (Emphasis in original and cases cited.)
  6. DISSENT. “The majority gives short shrift to the ‘substantial compliance’ test.”  Dissent at 9.

ERISA (8th Circuit): Over-The-Counter Vitamin Supplements Trigger Pre-Existing Condition Exclusion

Posted in ERISA

What sort of “medical treatment” triggers the pre-existing condition exclusion in an ERISA-governed disability policy?

Can taking over-the-counter vitamin supplements trigger the exclusion?  YES.

Here’s the case of Kutten v. Sun Life Assurance Company of Canada, __ F.3d __, 2014 WL 3562784 (8th Cir. July 21, 2014) (pdf).

FACTS: Kutten had a progressive eye disease. In 1994, his doctor directed him to start taking daily 15,000 unit doses of an over-the-counter vitamin A supplement. This could slow, but not cure, this progressive disease which can lead to blindness.

In June 2010 Kutten’s employer bought a new policy for the ERISA-governed disability benefit. This new policy excluded pre-existing conditions, defined as a condition in which the employee “received medical treatment, care or services, …or took prescribed drugs or medicines for the disabling condition” 3 months before the start of the policy. Kutten applied for disability benefits. Sun Life concluded the vitamin A supplements triggered the pre-existing condition exclusion as “medical treatment” and denied the claim. Kutten sued.

ISSUE:  Do vitamin  supplements constitute “medical treatment” sufficient to trigger the pre-existing condition exclusion?

TRIAL COURT HELD: Plaintiff wins — vitamin A supplements are not a “medical treatment” because such use does not require the same medical intervention as “prescribed drugs or medicines.”


  1. Drawing a sharp distinction between ‘prescribed drugs or medicines’ and ‘medical treatment’ is a virtually impossible task because ‘prescribed drugs or medicines’…are forms of ‘medical treatment.’” Op. at 5
  2. “[T]he ordinary meaning of the phrase ‘medical treatment’ would encompass Kutten’s vitamin A supplements.  The supplements are ‘medical’ in the sense that they prevented or alleviated the progression of Kutten’s [eye disease and]… constituted a ‘treatment’ because it was the ‘manner,’ in fact the only manner, by which Kutten could ‘care for’ his condition.”  Op. at 6.

More Disabled Employees But Fewer Employees Covered With Long Term Disability Coverage

Posted in ERISA

Here is a recent news item showing the scope of the employee disability problem.

In a nutshell:

There are more disabled employees than ever.  As of May 2014, the total number of Social Security disability beneficiaries in the United States hit an all-time high of about 11 million beneficiaries.

But fewer employees are covered with long term disability coverage.  The number of U.S. workers with long-term disability coverage decreased 6% from 2009-2013.

From 2009-2013:

  • fewer employers are offering long term disability coverage: down from 220,000 to 214,000
  • fewer employees have long term disability coverage: down from 34 million  to 32.1 million
  • more total number of employees in the U.S. workforce: up 6.6 million

An excellent article out of the July 17, 2014 Portland Press Herald summarizes the issue.


ERISA (1st Cir.): Lack of Cooperation During Functional Capacity Evaluation Bars Disability Claim

Posted in ERISA

You already know that impairment can be assessed through a Functional Capacity Evaluation (FCE).

But what happens when the claimant refuses to perform tasks requested, or does not try hard enough during the FCE?

Can you deny the claim for “lack of cooperation”?  Sometimes YES.

Here’s the case of Ortega-Candelaria v. Johnson & Johnson, __ F.3d __, 2014 WL 2696725 (1st Cir. June 16, 2014).

FACTS: In June 2003, plaintiff applied for ERISA-governed disability benefits because of back pain, anxiety and panic attacks. He failed to cooperate in a number of Functional Capacity Evaluations (FCEs) conducted by a physical therapist. Plaintiff “declined all lifting, carrying, pushing, pulling and climbing activities” and gave a “sub-maximal effort” on tasks. The Plan discontinued benefits “due to his lack of cooperation in the evaluation process.” Plaintiff sued, claiming a doctor had to conduct the FCE. The trial court granted summary judgment for the plan.


  1. The results of the FCE “‘suggest[ed] very poor effort or voluntary sub maximal effort, which is not necessarily related to pain, impairment or disability.’”  Op. at 10.
  2. “He failed 86% of the validity criteria…Video footage supports the conclusion that [plaintiff] was not cooperative.”  Op. at 19.
  3. “The Plan terms require that [plaintiff] cooperate during evaluations of his disability status; without such cooperation the plan administrator [can reduce or terminate benefits].”  Op. at 20.
  4. The decision to terminate benefits due to lack of cooperation was not an abuse of discretion. Op. at 20.
  5. An FCE evaluates a medical condition; a physician is not required for the test to be used in assessing impairment. Op. at 23.

ERISA: “Derivative Standing” Allows Medical Provider To Obtain Reimbursement From ERISA Plan

Posted in ERISA

Medical providers often have a patient/ERISA plan participant assign rights under an ERISA health care plan to allow the medical provider to seek payment for medical services provided.

But what if the patient/plan participant never was billed for the medical services? What rights are there to assign?

Is that an effective assignment?  YES.

Here’s the case of Univ. of Wisconsin Hospital and Clinics, Inc. v. Aetna Life Ins. Co., __ F.Supp. 2nd __, 2014 WL 2565284(W.D. Wis. June 6, 2014) (Derivative standing allows hospital to obtain reimbursement for medical services provided).

FACTS: ADP provided a health plan to employees, including James Vana. UW Hospital performed a heart catheterization for Vana, costing $14,000. Aetna paid $1,919 of the bill, but refused to pay the rest because Vana and the hospital failed to get precertification for the procedure.

Vana assigned his rights to reimbursement to UW Hospital, and the Hospital sued for reimbursement. Aetna argued: UW Hospital lacks standing to sue because Vana never received a bill.

ISSUE: Whether the hospital lacked standing to sue because the patient/plan participant never was billed for medical services, and thus had no rights to assign?

DISTRICT COURT HELDAssignment effective — hospital had “derivative standing.”

  1. UW Hospital had standing to sue. “[D]erivative standing. . .[furthers] the purposes of ERISA ‘to protect the interests of participants in employee benefit plans and their beneficiaries.’” Op. at 8-9.
  2. “If provider-assignees cannot sue the ERISA plan for payment, they will bill the participant or beneficiary directly for the insured medical bills, and the participant or beneficiary will be required to bring suit against the benefit plan when claims go unpaid.” Op. at 9 (citations omitted).
  3. “[P]roviders …are better situated and financed to pursue an action for benefits owed for their services [and] the interests of ERISA participants and beneficiaries are better served by allowing provider-assignees to sue ERISA plans.” Op. at 9 (citations omitted).
  4. Aetna’s denial of reimbursement was arbitrary and capricious because: (a) Vana would “plainly be entitled to benefits under the plan”; (b) Aetna failed to articulate “to UW Hospital a legitimate reason for its denial”; and (c) Aetna “interpreted its policy in an unreasonably contradictory manner.”  Op. at 10.

ERISA: Self-Funded Benefit Plans May Not Have To Cover Same-Sex Spouses?

Posted in ERISA

You already know that the Defense of Marriage Act (DOMA), which prohibited recognition of same-sex marriages, was declared unconstitutional.  United States v. Windsor, 133 S.Ct. 2675 (2013)

In states recognizing same-sex marriages, ERISA benefits, like life and disability benefits provided through insurance contracts, will most likely be viewed as covering a same-sex spouse.

But does the same apply to self-funded ERISA plans?  Maybe not.

Here’s the case of Roe and Doe v. Empire Blue Cross Blue Shield and St. Joseph Medical Center, __ F.Supp. 2d __, (S.D.N.Y May 1, 2014).

FACTS: New York recognizes same sex marriages, and Jane Roe and Jane Doe were married. St. Joseph Medical Center’s health plan for employees is self-insured and states: “Same sex spouses and domestic partners are NOT covered under this plan.” Roe sought to add Doe to the plan, which was rejected. Plaintiffs sued claiming defendants violated Section 510 of ERISA entitled “Interference with protected rights.”

ISSUE: Whether ERISA prohibits a private employer from excluding same-sex spouses?


  1. “ERISA…is not a dictator of plan terms.” Op. at 10.
  2. ERISA does not contain an anti-discrimination provision “because other federal laws already proscribed such discrimination.” Op. at 10.
  3. An ERISA plan “may, for example, choose not to provide benefits to spouses at all.”  Op. at 11.
  4. The clear import of United States v. Windsor [133 S.Ct. 2675 (2013)] is a shift in federal policy toward enforcing state laws that recognize same sex marriage.  Op. at 13.
  5. The exclusion [‘Same sex spouses and domestic partners are NOT covered under this plan.’] does not violate Section 510 of ERISA as it is currently promulgated.” Op. at 14 (Emph. added).

NOTE:  Look for self-funded plans, containing an exclusion against same-sex spouses,  to rely on this case.  Plans with that exclusion will argue that ERISA does not require employers to cover same-sex spouses under the plan.

ERISA 8th Circuit: Deciding Who Is The Beneficiary — The Abuse Of Discretion Standard Trumps The Substantial Compliance Doctrine

Posted in ERISA

Sometimes determining the correct beneficiary for ERISA-governed life insurance benefits can present real challenges. 

Can the deceased’s will prove the deceased’s intent designating the correct beneficiary?  It depends on the language of the will.

A Plan administrator, vested with discretion, can choose to excuse technical errors in beneficiary-designation forms or it can elect to enforce strictly the terms of the plan.

Here’s the case of Hall v. Metropolitan Life Insurance Company, __ F.3d__ (8th Cir. May 8, 2014)(PDF).

FACTS: Dennis Hall designated his son as sole beneficiary for ERISA-governed life insurance benefits.  In November 2010, however, Mr. Hall completed and signed, but never submitted, a new beneficiary designation claim form naming his wife, Jane Hall, as sole beneficiary.

After Mr. Hall died in 2011, Ms. Hall claimed she was entitled to the life benefits. She claimed Mr. Hall lacked adequate time to submit the approved form. She presented Mr. Hall’s will as evidence that he intended for her to be the sole beneficiary.  The Plan vested Met Life with discretion in determining eligibility.  Met Life denied her claim. Ms. Hall brought suit.

HELD:  Did MetLife abuse its discretion by refusing to recognize the deceased’s will in determining who was the beneficiary?

  1. “MetLife reasonably determined that the will was inadequate to effect a change in beneficiary.” The will “did not expressly address the distribution of assets that were not part of the estate.”  Op. at 6.
  2. The November 2010 form had no effect because “the Plan expressly required Dennis to submit a written beneficiary-change request within thirty days of signature for it to be effective, and he failed to do so.” Op. at 6.
  3. Conflict between language in the Plan and Summary Plan Description (SPD) did not matter. The Plan contained the thirty day requirement but the SPD was silent on this requirement. “The SPD’s silence on this point does not trump the Plan’s clear requirement.”  Op. at 6.
  4. Doctrine of Substantial Compliance. “An insured substantially complies with the change in beneficiary provisions of an ERISA life insurance policy when the insured: [a] evidences his or her intent to make the change and [b] attempts to effectuate the change by undertaking positive action which is for all practical purposes similar to the action required by the change of beneficiary provisions of the policy.”  Op. at 8.
  5. “[Even though] a court may decide as a matter of common law to excuse technical non-compliance with the terms of an ERISA plan, [that]  does not mean an administrator with discretion under an ERISA plan is forbidden to enforce strict compliance with plan requirements.” Op. at 8 (Emph. in original).
  6. In exercising its discretion, an administrator might choose to excuse technical errors in beneficiary-designation forms…or it might elect to enforce strictly the terms of the plan….  MetLife reasonably exercised its discretion in rejecting [the will and the November 2010 beneficiary form].” Op. at 9.
  7. [A]llowing an administrator to require technical compliance with policy provisions protects the administrator from ‘paying the wrong person and being forced to pay twice.’” Op. at 10.