ERISA allows an award of attorney fees “to either party” at the Court’s “discretion”— so long as the party seeking fees has achieved “some degree of success on the merits.” Hardt v. Reliance Standard Life Insurance Company, U.S. (May 24, 2010).
Hardt had surgeries for back, neck and carpal tunnel issues and made a long term disability claim under the applicable ERISA plan.
Reliance paid benefits for a while and then terminated benefits. Hardt sued.
District Court: The Court concluded Reliance’s denial of benefits was unreasonable, and remanded to Reliance for further review. Plaintiff then sought attorney fees for obtaining the remand. The Court awarded attorney fees to Hardt, concluding a remand satisfied the common law “prevailing party” requirement used in the Fourth Circuit. Reliance appealed.
COURT OF APPEALS: Vacated trial court. Rationale: Remand does not satisfy “prevailing party” requirement. To be a prevailing party one must obtain an “enforceable judgment on the merits.”
Hardt appealed to the U.S. Supreme Court.
UNITED STATES SUPREME COURT:
- One seeking attorney fees need not be a prevailing party to win attorney fees. The term “prevailing party” does not appear anywhere in the ERISA provision allowing for an award of attorney fees. Opinion at 8.
- Fees may be awarded in the Court’s discretion, but a court does not have unlimited discretion. Op. at 11
- One seeking fees must show “some degree of success on the merits.”
- Merely winning a “purely procedural victor[y] or a “trivial success on the merits” will not satisfy this requirement. Op. at 12.
- The District Court concluded there was “compelling evidence” of disability and that it was “inclined to rule in Ms. Hardt’s favor.” The trial court then remanded the matter for further review by Reliance. This ruling and remand is not “trivial success on the merits” or a “purely procedural victory.” This constitutes some “success on the merits” and fees may be awarded.