Pre-Hardt: A Simpler Time
Pre-Hardt, resolving a fee request based on a court-ordered remand was simple. Plaintiff’s counsel would ask for fees, and the court would say “no.” A remand was purgatory. Neither side had yet prevailed. The plaintiff had not been awarded benefits, but the defendant had not been released from the claim either. There was still more to do. As one court explained back at that time: “an award of attorney’s fees [under ERISA] presupposes that the recipient is the litigation’s ‘prevailing party,’” and “because plaintiff only will have the ERISA claim remanded to the plan administrator, he has not yet prevailed on the merits.” Marsteller v. Life Ins. Co. of N. Am., 1997 WL 403235 at *1 (W.D. Va. 1997). “Thus,” said the court, “it would be premature to award attorney's fees at this stage in the litigation.” Id. This view was widely held.
Hardt: “Some Degree of Success,” Not “Prevailing Party” Standard
The legal foundation on remand-based fee requests shifted significantly in 2010 when the Supreme Court issued its decision in Hardt. There, the Supreme Court made two important rulings. First, it held that unlike the fee-award provisions in certain federal statutes, § 1132(g)(1) of ERISA did not require a fee claimant to be a “prevailing party” in order to be eligible for a fee award. Hardt, 560 U.S. at 253–54. Instead, all a claimant had to do was achieve “some degree of success on the merits.” Id. at 255.
Second, the Court held that a court order remanding a claim for further consideration could, depending on the circumstances, qualify as “some degree of success on the merits” and thus make an award of fees appropriate under ERISA. Id. In doing so, the Court firmly rejected the notion that a remand order itself could never constitute “some success on the merits.” Id. The Supreme Court, however, did not define what circumstances could or would qualify as “some degree of success on the merits” in the context of a remand.
The Big Question: Is Remand Simpliciter Enough?
After Hardt, the most fundamental question left open was whether a remand simpliciter – i.e., a remand order, without more – constitutes “some success on the merits” under § 1132(g)(1). The answer is a resounding “maybe.”
On one hand, a large number of courts say yes. Indeed, over the last decade, “most courts have, in the wake of Hardt, determined that a remand to a plan administrator—by itself—does in fact constitute some success on the merits.” Bain v. Oxford Health Ins. Inc., 2020 WL 1332080 at *2 (N.D. Cal. Mar. 23, 2020). See also Fisher v. Aetna Life Ins. Co., 2020 WL 5898788 *6 n.9 (S.D.N.Y. Oct. 5, 2020) (collecting cases); Valentine v. Aetna Life Ins. Co., 2016 WL 4544036 at *4-5 (E.D.N.Y. Aug. 13, 2016) (also collecting cases).
These decisions are largely based on the reasoning that there are “two positive outcomes inherent in [a remand] order: (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.” Gross v. Sun Life Assur. Co. of Can., 763 F.3d 73, 78 (1st Cir. 2014). As one judge put it, “[t]he plaintiff, once sidelined, is now back in the game, with another shot at reaching his or her goal. Even if the plaintiff does not win the game, he or she won the opportunity to play a little longer.” Scott v. PNC Bank Corp. & Affiliates Long Term Disability Plan, 2011 U.S. Dist. LEXIS 69693 at *25 (D. Md. June 28, 2011).
On the other hand, some courts have refused to adopt a blanket rule. One court, for example, cautioned that “some kinds of remands might be for highly technical or clerical reasons, such that the act of remand might not qualify as ‘some degree of success on the merits.’ Hughes v. Hartford Life & Acc. Ins. Co., 2020 WL 563364 at *2 (D. Conn. Feb. 5, 2020). And another, in Woolsey v. Aetna Life Ins. Co., 2020 WL 5810198 (D. Az. Sept. 4, 2020), went even further. Rather than simply focusing on the remand order itself, the court compared the factual circumstances in Hardt with those in its own case. In doing so, it identified several key items in Hardt that were not present in its case, such as: (i) the finding that the administrator’s failure to comply with ERISA had denied the claimant a full and fair review, as required by the statute; and (ii) the district court’s overall positive assessment of the plaintiff’s claim. By contrast, the court in Woolsey “did not see Aetna’s conduct as an abuse of discretion” nor did it warn Aetna that an adverse decision could follow the remand. Id. at *3 (emphasis added). Instead, it said the factual circumstances in its case “differ[ed] meaningfully from those in Hardt” and fell “just shy of ‘some success on the merits.’” Id. at *4. The court closed by saying that while “[t]here may be cases where a remand order alone may indicate some success on the merits,” “this is not one of them.” Id.
“Trivial Success” or “Procedural Victory” Is Not Some Success on the Merits
Separately, even with a large number of courts holding that a remand, by itself, satisfies the “some success on the merits” standard from Hardt, a “trivial success” or a “procedural victory” in an ERISA case does not do so. So, for example, if an ERISA claimant successfully overturns a summary judgment dismissal decision on appeal, or succeeds in obtaining a holding that changes the standard of review for her ERISA claim, she has not satisfied the standard in Hardt. See e.g., Katherine P. v. Human Health Plan, Incorporated, 962 F.3d 841, 842 (5th Cir. 2020) (reversal of summary judgment in favor of ERISA defendant was “purely procedural victory” and not “some success on merits”); Ariana v. Humana Plan of Texas, Incorporated, 792 Fed.Appx. 287, 290 (5th Cir. Nov. 8, 2019) (obtaining reversal of district court’s application of abuse of discretion standard of review in favor of de novo review did not constitute “some success on the merits”). But see Gross, 763 F.3d at 79 (holding that obtaining ruling on appeal that favorably changes the standard of review for the claim qualifies as “some success on the merits.”). As the Fifth Circuit recently explained, neither of these circumstances “requires that the defendant do something besides what it was already doing – litigating the case.” Katherine P, 962 F.3d at 842.
“Eligible” for Fees Does Not Mean “Entitled” to Fees or Even Entitled to All Fees
Hardt did not change the fact that courts still have wide discretion to grant or deny a claimant’s post-remand fee request, in whole or in part, based on non-Hardt factors. Simply put, being eligible for ERISA fees under Hardt does not necessarily mean being entitled to fees or entitled to all of his fees.
For one, where a remand is the only relief that has been ordered in the case, courts have sometimes denied a claimant’s fee request in its entirety, essentially holding that eligibility did not translate into entitlement. Scott v. PNC Bank Corp. & Affiliates Long Term Disability Plan, 2011 WL 3510999 at *4 (D. Md. Aug. 9, 2011) (remand did not justify entitlement to fees; “Plaintiff's success was not significant, because it resulted in a reevaluation by the Plan administrator, but not an award of ultimate relief by the Court”), Report and Recommendation Adopted by, 2011 WL 6439996 (D. Md., Dec. 15, 2011).
As well, even where courts have awarded fees based solely on a remand, they have readily reduced the amount of the request—sometimes substantially—because the claimant still has not obtained any actual benefits. See, e.g., Fisher, 2020 WL 5898788 at *10 (reducing fee request by 75% based on plaintiff’s limited success where remand was ordered); Schuman v. Aetna Life Ins. Co., 2017 WL 2662181 at*10 (D. Conn. June 20, 2017) (same). In fact, abundant case law exists supporting such reductions. Fisher, 2020 WL 5898788 at *10 (collecting cases).
Conclusion
In sum, after Hardt, a court-ordered remand for further review is definitely not the ideal scenario for a defendant in an ERISA benefits case facing a request for attorney’s fees. But the case law teaches that defendants still have many weapons in their arsenal to defend against such request. Cases such as Woolsey, for example, show that defendants can—and should—challenge the notion of whether the plaintiff is even entitled to fees in the first place, especially when the facts in their cases are less compelling than the facts that existed in Hardt. A good example would be where a sparse administrative record requires a court to remand a claim for further review but does not compel it to conclude that the administrator failed in its “full and fair review” duties under ERISA. And even if that argument falls on deaf ears, a defendant should always argue for a reduction in the amount of any fee award—perhaps even all the way down to zero—by emphasizing the true purgatory nature of a remand.
Richard F. Hawkins III of The Hawkins Law Firm, PC, in Richmond, Virginia, is a seasoned AV-rated attorney who regularly practices ERISA, life, health, and disability law. He was selected as a Super Lawyer Rising Star for Employee Benefits/ERISA in 2011 and is regularly included in Virginia Business Magazine’s “Legal Elite” for Labor & Employment. He has also served as a guest lecturer at the University of Richmond School of Law for life, health, disability and AD&D insurance topics.