Olds v. Retirement Plan of International Paper
ORDER granting 45 Motion for Attorney Fees. The plaintiff is awarded the sum of $24,074.70. Signed by Chief Judge William H. Steele on 6/1/2011. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
) CIVIL ACTION 09-0192-WS-N
RETIREMENT PLAN OF
INTERNATIONAL PAPER COMPANY, )
This matter is before the Court on the plaintiff’s motion for attorney’s fees, costs
and expenses. (Doc. 45). The parties have filed briefs in support of their respective
positions, (Docs. 45, 49, 50), and the motion is ripe for resolution.
The plaintiff sued after the defendant (“the Plan”) denied him retirement disability
benefits. The Court denied the Plan’s motion for summary judgment and set the case for
bench trial. Once it was determined that the record was limited to the administrative
record, the hearing was cancelled and the case submitted on briefs. The Court ultimately
ruled that the Plan failed to provide the plaintiff the “full and fair review” required by
statute and remanded to the Plan to do so. (Docs. 43-44).
As set forth in the Court’s order, the plaintiff was employed by International Paper
Company for many years in a heavy-duty capacity. He last worked in March 2006 and
underwent a total knee replacement in April 2006. The plaintiff was a participant in the
Plan and was eligible to apply for benefits pursuant to the Plan. In December 2006, the
plaintiff applied for retirement disability benefits without clearly articulating the basis of
his claim, and the Plan denied benefits. The plaintiff timely perfected an administrative
appeal, explicitly notifying the Plan that he claimed disability based on his chronic
venous stasis and submitting medical records substantiating the existence of this
condition. The Plan completely ignored these records and completely ignored the
plaintiff’s stated basis of disability, instead determining only that the plaintiff was not
disabled by his knee condition. The Plan was thus in gross violation of 29 U.S.C. §
1133(2) and its implementing regulations. Because the medical records were not so clear
as to demonstrate that any ultimate denial of benefits based on chronic venous stasis
would be insupportably arbitrary and capricious, the Court did not order the Plan to
award benefits but instead ordered the Plan to conduct the full and fair review it has
heretofore inexcusably denied the plaintiff.
The plaintiff thereafter timely filed the instant motion for fees and expenses. The
Plan objects: (1) that the plaintiff has not achieved sufficient success to permit an award
of fees; (2) that the relevant factors informing the Court’s discretion as to an award weigh
against such an award; and (3) that the requested fees, if awarded at all, should be
reduced. The Court addresses these contentions in turn.
A. Success on the Merits.
“In any action under this subchapter …, the court in its discretion may allow a
reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). A
plaintiff need not be a “prevailing party” in order to receive an award under Section
1132(g)(1). Hardt v. Reliance Standard Life Insurance Co., 130 S. Ct. 2149, 2156
(2010). Instead, a party is “eligible” for an award of fees and costs, id. at 2158 n.8, “as
long as the fee claimant has achieved some degree of success on the merits.” Id. at 2152
(internal quotes omitted); accord id. at 2158. “A claimant does not satisfy that
requirement by achieving trivial success on the merits or a purely procedural victor[y].”
Id. (internal quotes omitted). The standard is met, however, “if the court can fairly call
the outcome of the litigation some success on the merits without conducting a lengthy
inquir[y] into the question whether a particular party’s success was substantial or
occurred on a central issue.” Id. (internal quotes omitted).
The Plan argues that the Court’s remand order does not attain the Hardt threshold
because it did not direct the Plan to award benefits or indicate that benefits should be
awarded. The Plan further complains that the plaintiff did not seek remand but
affirmatively argued against remand. (Doc. 49 at 2-5).
In Hardt, the trial court remanded for a full and fair review under Section 1133(2).
The Supreme Court, however, declined to say “whether a remand order, without more,
constitutes some success on the merits sufficient to make a party eligible for attorney’s
fees under § 1132(g)(1).” 130 S. Ct. at 2158-59. Instead, the Court also noted that the
district court found compelling evidence of disability and was inclined to rule in the
plaintiff’s favor but remanded to give the defendant a chance to rectify deficiencies in its
review, with the warning that the court would enter judgment for the plaintiff should the
defendant not promptly provide such a review. The Court also noted that, before fees
were sought, the defendant had reversed its decision and awarded the plaintiff benefits.
Id. But the Court did not say that these circumstances constitute the floor for “some
degree of success on the merits.” On the contrary, the Court ruled that these facts
established “far more” than the minimum threshold, id. at 2159, so the actual floor must
be far below the Hardt scenario.
The Hardt Court borrowed its standard from Ruckelshaus v. Sierra Club, 463 U.S.
680 (1983). Lower court cases citing these Supreme Court authorities have usually
concluded that a remand to the defendant to conduct further administrative proceedings is
not a merely procedural victory but reflects a sufficient degree of success on the merits to
qualify for an award of fees and expenses. See, e.g., Michigan v. U.S. Environmental
Protection Agency, 254 F.3d 1087, 1091 (D.C. Cir. 2001); Frye v. Metropolitan Life
Insurance Co., 2011 WL 466686 at *5 (W.D.W. Va. 2011); Young v. Verizon’s Bell
Atlantic Cash Balance Plan, 748 F. Supp. 2d 903, 911-12 (N.D. Ill. 2010) (citing cases);
Bowers v. Hartford Life & Accident Insurance Co., 2010 WL 4117515 at *2 (S.D. Ohio
2010); Blajei v. Sedgwick Claims Management Services, Inc., 2010 WL 3855239 at *3-4
(E.D. Mich. 2010). Contra Dickens v. Aetna Life Insurance Co., 2011 WL 1258854 at *5
(W.D.W. Va. 2011); Christoff v. Ohio Northern University Employee Benefit Plan, 2010
WL 3958735 at *2 (N.D. Ohio 2010).
Missing from most of these and other cases is a thoughtful consideration of what
the term “merits” denotes. The answer lies in Ruckelshaus, where the Court made clear
that “merits” refers to “the merits of [a party’s] claims” and that “claims” are the claims
asserted in the litigation. 463 U.S. at 681-82. Thus, a plaintiff has experienced “some
degree of success on the merits” when he presents a claim that the defendant violated his
rights and the court rules that the defendant did violate those rights.1 That is precisely
what occurred here: among other arguments, the plaintiff claimed that the Plan violated
his statutory right to a full and fair review, and the Court held that the Plan did indeed
violate that right.
That the relief the plaintiff received on this meritorious claim is a full and fair
administrative review rather than a guaranteed award of benefits at the judicial or
administrative level may speak to the quantum of his success on the merits of his claim,
but it does not convert his substantial success on that claim into failure or trivial success.
In Ruckelshaus, for example – which serves as Hardt’s template for construction of
Section 1132(g)(1) – the Court confirmed that a provision awarding fees “whenever …
appropriate” extends “to suits that forced defendants to abandon illegal conduct.” 463
U.S. at 686 n.8. The Court’s order commanding the Plan to provide the plaintiff a full
and fair review forces the Plan to abandon its illegal conduct of not providing the plaintiff
such a review. Nothing in Hardt or Ruckelshaus supports the Plan’s ipse dixit that only
The Court does not suggest that only such a clear-cut victory constitutes “some degree
of success on the merits,” but on the facts of this case it need not consider what lower degree of
success might suffice.
an actual or guaranteed award of benefits constitutes “some degree of success on the
The Plan next attempts to crack the same nut a different way, arguing that a
remand for further administrative proceedings is a “purely procedural victory.” By
definition, that which constitutes some degree of success on the merits cannot also
constitute a purely procedural victory, but the Court pauses to address the misconception
embraced by the Plan.
“Procedural remedies … are to be distinguished from ‘purely procedural victories
….’” Chemical Manufacturers Association v. U.S. Environmental Protection Agency,
885 F.2d 1276, 1279 (5th Cir. 1989) (emphasis added). Procedural victories are those a
party obtains in the course of the litigation but that do not result in any success on the
litigated claim itself.2 Procedural remedies, in contrast, follow a substantive victory,
which victory necessarily reflects some degree of success on the merits of the litigated
Finally, the Plan asserts that the plaintiff never wanted a remand (because he quite
naturally preferred an immediate award of benefits by the Court), so that a remand cannot
constitute a subjective success for him. The Plan offers no argument or authority in
support of its position. As noted above, remand rather than immediate award may temper
the degree of success the plaintiff has obtained, but it does not eliminate the success he
received from a judicial finding that the Plan violated his statutory rights and a judicial
command to re-evaluate his claim in accordance with law.
Examples of procedural victories are the trial court’s denial of an opponent’s dispositive
motions and the appellate court’s reversal of the grant of such motions. Richardson v. Penfold,
900 F.2d 116, 119 (7th Cir. 1990). Others would include favorable rulings on discovery disputes
or motions in limine and orders disqualifying opposing counsel. Hunger v. Leininger, 15 F.3d
664, 670 (7th Cir. 1994). Both Richardson and Hunger speak of “remands” as being procedural,
but they address appellate remands to the trial court – remands within the four corners of the
litigation itself – not remands from the trial court to the administrator. This is exactly the
distinction on which the Court relied to deny fees in Kenseth v. Dean Health Plan, Inc., 2011
WL 901388 at *15 (W.D. Wis. 2011).
For the reasons set forth above, the Court concludes that the plaintiff has obtained
a degree of success on the merits sufficient to trigger the Court’s discretion whether to
award fees and expenses.
District courts in our circuit should consider five factors in
determining whether to award attorney’s fees:
(1) the degree of the opposing parties’ culpability or bad faith; (2) the
ability of the opposing parties to satisfy an award of attorney’s fees; (3)
whether an award of attorney’s fees against the opposing parties would
deter other persons acting under similar circumstances; (4) whether the
parties requesting attorney’s fees sought to benefit all participants and
beneficiaries of an ERISA plan or to resolve a significant legal question
regarding ERISA itself; [and] (5) the relative merits of the parties’ positions.
Byars v. Coca-Cola Co., 517 F.3d 1256, 1268 (11th Cir. 2008) (quoting Freeman
v. Continental Insurance Co., 996 F.2d 1116, 1119 (11th Cir. 1993)). The Hardt Court
described these factors as “bear[ing] no obvious relation to § 1132(g)(1)’s text or to our
fee-shifting jurisprudence,” but it did not “foreclose the possibility” that a court could
appropriately consider them as a second step after finding that the fee claimant had
achieved adequate success on the merits. 130 S. Ct. at 2158 & n.8. The Eleventh Circuit
has not addressed whether these factors retain currency in the post-Hardt world, but the
Fourth and Ninth Circuits have decided that they do. Williams v. Metropolitan Life
Insurance Co., 609 F.3d 622, 636 (4th Cir. 2010); Simonia v. Glendale Nissan/Infiniti
Disability Plan, 608 F.3d 1118, 1121 (9th Cir. 2010). Accordingly, the Court utilizes
these factors in determining whether to make an award.3 None of them is necessarily
decisive. Freeman, 996 F.2d at 1119.
Other factors might be relevant in a given case, Freeman, 996 F.2d at 1119, but neither
party identifies any such factors or requests the Court to employ them.
The Plan asserts that bad faith connotes the absence of any arguable reason for the
challenged decision. (Doc. 49 at 7). See Florence Nightingale Nursing Service, Inc. v.
Blue Cross/Blue Shield, 41 F.3d 1476, 1485 (11th Cir. 1995); Freeman, 996 F.2d at 1120.
The Plan says it could not have denied benefits in bad faith because the Court has ruled
that, based on the materials the plaintiff provided concerning chronic venous stasis
(which the Plan never considered), the Plan could have reasonably concluded (though it
never did) that the plaintiff’s condition was not disabling at the relevant time. Since the
plaintiff prevailed on a Section 1133(2) claim, it is not clear that the relevant decision is
the denial of benefits rather than the disregarding of the plaintiff’s asserted disabling
condition and the medical records supporting his assertion. At any rate, even if the Plan
did not act in bad faith, it was at a bare minimum careless in completely ignoring what
was patently the basis of the plaintiff’s claim, and carelessness constitutes culpable
conduct. Wright v. Hanna Steel Corp., 270 F.3d 1336, 1345 (11th Cir. 2001). The Plan
offers, and the Court finds, no reason to ignore the Plan’s glaring omission of its
unequivocal duty to consider the plaintiff’s pellucid presentation. The first factor favors
The Plan does not deny that it has the ability to pay an award of fees and expenses.
Instead, it suggests the Court should be loath to award fees because the Plan is “funded
by a finite pool of assets.” (Doc. 49 at 8). Presumably all entities possess a finite
quantum of resources, but the Plan has offered no evidence to suggest that its pool is
unusually small, shallow or endangered. This is not surprising, given that the Plan is
maintained for International Paper, one of America’s largest corporations. The second
factor favors an award.
The Plan argues that, because it was not culpable, there is nothing to deter. (Doc.
49 at 8). Actually, as discussed above, it was and there is. It is appropriate to weigh the
need to deter improper behavior in considering whether to make an award of fees. E.g.,
Oliver v. Coca-Cola Co., 497 F.3d 1181, 1203 (11th Cir. 2007) (upholding an award
based in part on “the need to deter fiduciary decision-making of the sort found in this
case”) (internal quotes omitted). Awarding fees can only serve to make the Plan more
attentive to its statutory obligation to actually consider claimants’ claims and to reduce
the Plan’s incentive to gloss over them. The third factor favors an award.
The parties and the Court agree that the fourth factor does not favor an award.
This is not dispositive. E.g., Wright, 270 F.3d at 1344-45 (upholding an award even
though the fourth factor did not favor an award).
The Plan argues that the relative merits of the parties’ positions will not be known
until after the Plan completes its Court-ordered full and fair review. (Doc. 49 at 8-9).
The relevant merits, however, do not concern whether the plaintiff will ultimately receive
benefits but whether the Plan violated the plaintiff’s right to a full and fair review of his
claim. The disparity in those merits is stark, as set forth in the Court’s previous orders.
This is not, and never has been, anything like a close case, the Plan’s best efforts to show
otherwise notwithstanding. The fifth factor favors an award.
For the reasons set forth above, the Court concludes that it should exercise its
discretion in favor of an award fees and expenses.
C. Amount of the Award.
The plaintiff seeks $23,557.50 in fees, representing 104.7 hours at $225 an hour,
plus $517.20 in expenses. (Doc. 45 at 5-8). The Plan does not challenge the hourly rate,
and the only entry it challenges as suspiciously high is for 7.5 hours in connection with
the motion for fees. (Doc. 49 at 6). Given that the plaintiff was required to prepare a
reply brief responding to the Plan’s many arguments, the Court does not find 7.5 hours
unreasonably high. To the extent the Plan suggests generally that the time entries are too
vague, (id.), the Court disagrees. The Court finds the requested hours to have been
actually and necessarily expended and the hourly rate reasonable for the market, work
and time period involved. The Court likewise finds the requested expenses to have been
actually and necessarily incurred and reasonable in amount.
The Plan insists that contemporaneous billing records are essential, (Doc. 49 at 6),
but the submitted records appear on their face to meet this standard; that a few entries
may contain later annotations further explaining the need for the work performed does
not draw into question the contemporaneous nature of the entries. Moreover, the very
authority on which the Plan relies states that “[f]ailing to provide contemporaneous
billing statements does not preclude an award of fees per se, as long as the evidence
produced is adequate to determine reasonable hours. ” Louisiana Power & Light Co. v.
Kellstrom, 50 F.3d 319, 325 (5th Cir. 1995); accord Jean v. Nelson, 863 F.2d 759, 772
(11th Cir. 1988) (“Our court … has held that contemporaneous time records are not
indispensable where there is other reliable evidence to support a claim for attorney’s
fees.”); Johnson v. University College, 706 F.2d 1205, 1207 (11th Cir. 1983) (“The lack
of contemporaneous records does not justify an automatic reduction in the hours
claimed.”). The plaintiff’s submissions are reliable, and the Plan articulates no argument
to the contrary.
Finally, the Plan argues that any award should be “significantly discounted”
because the plaintiff has not obtained financial relief but only the possibility of such relief
as a result of the judicially ordered full and fair review. (Doc. 49 at 9). The Plan has
cited only “prevailing party” cases in support of its argument, and the Court will not
undertake research or analysis on the Plan’s behalf in an effort to satisfy itself that those
principles can or should be extrapolated to the Section 1132(g)(1) context.
For the reasons set forth above, the Court concludes that the plaintiff should be
awarded the full amount requested.
The plaintiff’s motion for attorney’s fees, costs and expenses is granted. The
plaintiff is awarded the sum of $24,074.70.
DONE and ORDERED this 1st day of June, 2011.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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