The difficulties of ERISA litigation have been discussed often, and in those situations where “success” occurs, courts often “permit” a fee application to be taken under consideration. A recent case from the Federal Court, District Court of New Mexico, serves to address “success” – a necessary component to secure legal fees, and notes that a claimant “does not satisfy” the United States Supreme Court standard of “some success on the merits” by achieving trivial success or a purely procedural victory.
Instead, success occurs where the court can fairly call the outcome of the litigation some success without conducting a lengthy inquiry. Thus, the Court in Chandhok v. Campanion Life Ins. Co. determined that securing a remand of the claim to the administrator constituted some degree of success on the merits. The Court offered as its rationale that remand was the result of the court’s full review of the merits of the case, and determined some level of deficiency warranting further consideration, and the claimant gained a benefit as a result of remand, in securing a further consideration.
Thus, the Court determined that legal fees were warranted for the claimant – determining that the claimant had achieved more than trivial success or a pure procedural victory.
Once that determination was made and that hurdle cleared, the Court then considered what “reasonable attorney’s fees” would be, weighing a myriad of factors. These factors include the degree of culpability or bad faith, the ability to pay the fee award, whether an award of fees would deter future conduct, whether the claimant sought to benefit all beneficiaries or resolve a significant legal question, and the relative merits of the parties’ positions. In weighing these factors, the Court determined that culpability existed, based upon the insurer’s conduct. The Court determined that the insurer had the ability to pay, and that an award could act to deter similar future conduct. The Court found that the claimant did not seek to benefit others or resolve a significant legal issue and found the relative merits to favor the claimant. Thus, an award was appropriate.
Having cleared that hurdle, the remaining hurdle was the amount of the award, how many hours to award and/or reduce and what hourly rate to award. The Court refused to award fees for time spent before the commencement of the litigation – and during the administrative process – as ERISA did not provide for such recovery. The Court did award fees, and paid at the requested hourly rate, over objections from defendant, as well as providing interest and costs for the litigation.
This is a huge “success” as not every remand is considered to be a success. We have found remands to be a default conclusion often reached by courts – with varying impact. One of our cases that was remanded many years ago, Magee v. Met Life 632 F.Supp2d. 308 (S.D.N.Y. 2009) resulted in a remand where the client has been able to successfully navigate the claim process smoothly with our firm immediately following our remand submission.
However, many times a remand from a court allows the insurer to perform a better job of insulating the claim, leading to a future defeat in court when a new record is presented.
We often see courts significantly curtail the legal fees sought following some success on the merits. Courts will often refuse to provide counsel with its hourly rates, despite proof to support same, and/or will often cut the amount of hours to which compensation is provided, for a multitude of reasons. This serves to further discourage litigation of ERISA disability cases but puts even more emphasis on the important of a successful administrative appeal.
Chandhok v. Companion Life Ins. Co., U.S. D. Ct. N. Mex. 2021 (2021 U.S. Dist. LEXIS 160609)
