Alaska Employment Law

The United States Supreme Court issued an opinion on Monday, May 24, 2010, addressing the standards for recovery of fees by plaintiffs in ERISA cases alleging denial of benefits.  The case is Hardt v. Reliance Standard Life Insurance Company.

Hardt was denied benefits under her employer’s long-term disability plan.  She filed suit.  Both she and the plan administrator, Reliance Standard Life Insurance, moved for summary judgment.  The district court denied Reliance’s motion.  The district court also denied Hardt’s motion, but expressed its view that it was inclined to rule in her favor but wanted Reliance to re-evaluate her claim.  The district court therefore remanded.  On remand, Reliance awarded Hardt benefits.  Hardt then sought attorneys’ fees.  The district court granted Hardt’s motion.  On appeal, the Fourth Circuit reversed, holding that Hardt was not technically a prevailing party under existing precedent because she did not secure a judgment on the merits or a court-ordered consent decree. This is the Buckhannon standard for recovery of fees by a prevailing party.

The United States Supreme Court reversed by what was effectively a unanimous opinion (Justice Stevens concurred in major parts and concurred in the overall judgment).   The Court noted that ERISA’s benefits claim provision does not limit an award of fees to a “prevailing” party.  Instead, it simply speaks in terms of court-ordered fees to either party.  It necessarily followed that one need not be a prevailing party to be entitled to an award of fees under 29 U.S.C. § 1132(g)(1). The Court noted that other ERISA provisions required that a judgment be awarded to the plaintiff before fees may be sought (such as the provision addressing recovery for delinquent contributions). The Court instructed that the correct standard for cases such as Hardt’s was that fees could be awarded so long as “some degree of success” was secured.   She met that standard on the facts.  Therefore, the Court concluded she was entitled to fees.