Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03408/USCOURTS-cand-3_05-cv-03408-7/pdf.json

Parties Involved:
Donald Douglas
Plaintiff
Hartford Life and Accident Insurance Company
Defendant
Wal-Mart Stores, Inc. Employee Long Term Disability Benefits Plan
Defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

DONALD DOUGLAS,

Plaintiff,

 v.

HARTFORD LIFE AND ACCIDENT

INSURANCE COMPANY, WAL-MART

STORES, INC. EMPLOYEE LONG TERM

DISABILITY BENEFITS PLAN, and

DOES 1–50, 

Defendants. /

No. C 05-03408 WHA

ORDER DENYING

PLAINTIFF’S MOTION

FOR ATTORNEY’S FEES

After plaintiff’s disability benefits were terminated, the instant action was brought

pursuant to the Employee Retirement Income Security Act, 29 U.S.C. 1132. Plaintiff prevailed

on summary judgment. The matter was remanded to the plan fiduciary for reconsideration. 

The Court held that the plan administrator had abused its discretion by terminating plaintiff’s

benefits without conducting a more thorough investigation. Judgment was entered in favor of

plaintiff. He now seeks attorney’s fees. This order considers the Ninth Circuit’s balancing

factors and finds that an award of fees would be premature. 

Under 29 U.S.C. 1132(g)(1), a court has discretion to award reasonable attorney’s fees

and costs. The Ninth Circuit has also found that ERISA “should be liberally construed in favor

of protecting participants in employee benefits plans,” and that a plan participant or beneficiary

who prevails in his suit under Section 1132 “should ordinarily recover an attorney’s fee unless

Case 3:05-cv-03408-WHA Document 50 Filed 09/11/06 Page 1 of 3
United States District Court

For the Northern District of California

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special circumstances would render such an award unjust.” Smith v. CMTA-IAM Pension Trust,

746 F.2d 587, 589 (9th Cir. 1984) (internal quotation marks omitted). The Ninth Circuit has

identified five factors to consider in deciding whether to award attorney’s fees and costs: 

(1) the degree of the opposing parties’ culpability or bad faith;

(2) the ability of the opposing parties to satisfy an award of fees;

(3) whether an award of fees against the opposing parties would

deter others from acting under similar circumstances; (4) whether

the parties requesting fees sought to benefit all participants and

beneficiaries of an ERISA plan or to resolve a significant legal

question regarding ERISA; and (5) the relative merits of the parties’

positions.

Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980). 

The final factor — the relative merits of the parties’ positions — is open to

two interpretations in the instant case. That ambiguity is determinative, rendering it premature

to decide the issue of fees and costs now. On one hand, the Court ruled in plaintiff’s favor that

defendants abused their discretion by terminating his benefits without conducting a more

thorough investigation and/or advising him of the specific type of information necessary to

perfect his claim (Order Denying Mot. for Summary J. 9). To that extent, plaintiff’s position

was more meritorious than that of defendants. There has been, however, no determination of

the ultimate issue in this action: whether or not plaintiff was entitled to benefits. It may turn

out that plaintiff’s position that he was entitled to benefits has no merit. This order holds that,

given that the controversy is not over and that it is unclear to what degree plaintiff ultimately

will prevail, an award of fees now would be premature. If plaintiff prevails ultimately and

receives benefits, he might be entitled to fees and costs beyond those he could justify now. If

he ultimately fails, the relative merits of the parties may be materially different than they are

now — perhaps weighing substantially more in defendants’ favor. Plaintiff may make a new

motion for fees after the ultimate benefits determination is made. 

Saffle v. Sierra Pacific Power Co. Bargaining Unit Long Term Disability Income Plan,

85 F.3d 455 (9th Cir. 1996), held that a plan administrator had abused its discretion when it

misconstrued a disability-insurance plan and applied the wrong standard to determine

entitlement to benefits. It remanded the case to the administrator for reevaluation. The court

then denied plaintiff’s request for attorney’s fees on appeal on the grounds that such an award

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United States District Court

For the Northern District of California

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would be “premature.” The court did not explain why the award would be premature. The only

apparent, reasonable basis for this finding, however, was that the ultimate decision had not been

made as to the plaintiff’s entitlement to benefits. Just as no ultimate decision had been made in

Saffle, none has been made here. Id. at 456–57, 461. 

Plaintiff contends that Saffle is inapposite because it ruled on attorney’s fees incurred on

appeal. This distinction does not eliminate the fact that the ultimate decision has not been

reached in the instant case, thereby making it prudent and more efficient to wait until after a

final decision to decide the fees issue. 

Because the uncertainty on this particular Hummel factor is determinative, there is no

need to make a final determination on the other Hummel factors. At this point, however, the

Court finds that two of the other Hummell factors cut in defendants’ favor. There has been no

finding of bad faith on their part. This action directly benefitted only plaintiff. No significant

legal issue was addressed. Two other factors support plaintiff. Defendants have the ability to

satisfy an award of fees, and have acknowledged such in their opposition brief (Opp. 6). 

Additionally, an award of fees will encourage defendants and others to investigate claims more

carefully and thoroughly. 

For the reasons stated, plaintiff’s motion is DENIED.

IT IS SO ORDERED.

Dated: September 11, 2006. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-03408-WHA Document 50 Filed 09/11/06 Page 3 of 3