ERISA Attorneys' Fee Provision Does Not Limit Fee Awards to the Prevailing Party

In Hardt v. Reliance Standard Ins. Co., No. 09-448, the United States Supreme Court held that a person does not have to be a "prevailing party" in order for attorneys' fees to be awarded under 29 U.S.C. § 1132(g)(1) of ERISA.  Attorneys' fees may be awarded to either party if the fee claimant shows that he or she has achieved "some degree of success on the merits."  The Court noted that the standard under Section 1132(g)(1) for awarding attorneys' fees is different from the standard under Section 1132(g)(2). Section 1132(g)(2) governs awards of attorneys' fees in actions to recover delinquent employer contributions to a multiemployer plan, and requires a judgment in favor of the plan in order for attorneys' fees to be awarded. The Court stated in a footnote that its decision does not foreclose a court, after a fee applicant has met his or her burden, from applying the five-factor test for awarding attorneys' fees used in the Fourth Circuit Court of Appeals, which test also is used in other circuits, including the Tenth Circuit Court of Appeals.

10th Circuit Standard for Award of ERISA Attorneys Fees

In order to obtain attorneys' fees in the Tenth Circuit Court of Appeals under ERISA, 29 U.S.C. § 1132(g), a claim must have substantial merit or be one of great public importance.  Te’O v. Morgan Stanley & Co., 2009 U.S. App. LEXIS 2770 (10th Cir. Feb. 11, 2009).

Attorneys' Fees Not Available Under ERISA for Pre-Litigation Administrative Proceedings

In Hahnemann University Hospital v. All Shore, Inc., 514 F.3d 300 (3rd. Cir. 2008), the court held that the provision permitting awards of attorneys' fees in an ERISA action, 29 U.S.C. § 1132(g)(1), restricts a court to awarding attorneys' fees incurred in formal judicial actions only, and not attorneys' fees incurred for the pre-litigation process.

The court's holding is consistent with that of five other circuit courts of appeals:  the 2nd, 4th, 6th, 8th, and 9th circuits.

 

 

Attorneys' Fees Not Available Under ERISA for Pre-Litigation Administrative Proceedings

In Hahnemann University Hospital v. All Shore, Inc., 514 F.3d 300 (3rd. Cir. 2008), the court held that the provision permitting awards of attorneys' fees in an ERISA action, 29 U.S.C. § 1132(g)(1), restricts a court to awarding attorneys' fees incurred in formal judicial actions only, and not attorneys' fees incurred for the pre-litigation process.

The court's holding is consistent with that of five other circuit courts of appeals:  the 2nd, 4th, 6th, 8th, and 9th circuits.

 

 

Attorneys' Fees Awarded Against Plaintiff Pension Plan

In Sullivan v. Randolph, 504 F.3d 665 (7th Cir. 2007), the Seventh Circuit Court of Appeals entered an award of attorneys' fees, pursuant to ERISA provision 29 U.S.C. § 1132(g)(1), against a plaintiff multi-employer pension plan in a case seeking contributions to a plan.  The court held that the plan's claim "lacked substantial justification" thus warranting an award of attorneys' fees. 

The court also criticized the 5-factor test for determining the appropriateness and size of an award of attorneys' fees articulated previously by that circuit in Bittner v. Sadoff & Rudoy Industries, 728 F.2d 820 (7th Cir. 1984), as being needlessly complex and having outlived its usefulness.  It seems to me that parties seeking or defending against attorneys' fees should nonetheless argue the relevant factors articulated in that test because they provide a means for evaluating the merits of an award of attorneys' fees.