Source: https://supreme.justia.com/cases/federal/us/560/242/
Timestamp: 2019-04-22 10:14:42+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 560 › Hardt v. Reliance Standard Life Ins. Co.
HARDT v. RELIANCE STANDARD LIFE INSURANCE CO.
After medical problems forced petitioner Hardt to stop working, she filed for long-term disability benefits under her employer’s long-term disability plan. Upon exhausting her administrative remedies, Hardt sued respondent Reliance, her employer’s disability insurance carrier, alleging that it had violated the Employee Retirement Income Security Act of 1974 (ERISA) by wrongfully denying her benefits claim. The District Court denied Reliance summary judgment, finding that because the carrier had acted on incomplete medical information, the benefits denial was not based on substantial evidence. Though also denying Hardt summary judgment, the court stated that it found “compelling evidence” in the record that she was totally disabled and that it was inclined to rule in her favor, but concluded that it would be unwise to do so without giving Reliance the chance to address the deficiencies in its approach. The court therefore remanded to Reliance, giving it 30 days to consider all the evidence and to act on Hardt’s application, or else the court would enter judgment in Hardt’s favor. Reliance did as instructed and awarded Hardt benefits. Hardt then filed a motion under 29 U. S. C. §1132(g)(1), a fee-shifting statute that applies in most ERISA lawsuits and provides that “the court in its discretion may allow a reasonable attorney’s fee and costs … to either party.” Granting the motion, the District Court applied the Circuit’s framework governing attorney’s fee requests in ERISA cases, concluding, inter alia, that Hardt had attained the requisite “prevailing party” status. The Fourth Circuit vacated the fees award, holding that Hardt had failed to establish that she qualified as a “prevailing party” under the rule set forth in Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U. S. 598, 604, that a fee claimant is a “prevailing party” only if he has obtained an “enforceable judgmen[t] on the merits ” or a “court-ordered consent decre[e]. ” The court reasoned that because the remand order did not require Reliance to award Hardt benefits, it did not constitute an enforceable judgment on the merits.
1. A fee claimant need not be a “prevailing party” to be eligible for an attorney’s fees award under §1132(g)(1). Interpreting the section to require a party to attain that status is contrary to §1132(g)(1)’s plain text. The words “prevailing party” do not appear in the provision. Nor does anything else in §1132(g)(1)’s text purport to limit the availability of attorney’s fees to a “prevailing party.” Instead, §1132(g)(1) expressly grants district courts “discretion” to award attorney’s fees “to either party.” (Emphasis added.) That language contrasts sharply with §1132(g)(2), which governs the availability of attorney’s fees in ERISA actions to recover delinquent employer contributions to a multiemployer plan. In such cases, only plaintiffs who obtain “a judgment in favor of the plan” may seek attorney’s fees. §1132(g)(2)(D). The contrast between these two paragraphs makes clear that Congress knows how to impose express limits on the availability of attorney’s fees in ERISA cases. Because Congress failed to include in §1132(g)(1) an express “prevailing party” requirement, the Fourth Circuit’s decision adding that term of art to the statute more closely resembles “invent[ing] a statute rather than interpret[ing] one.” Pasquantino v. United States, 544 U. S. 349, 359. Pp. 8–9.
2. A court may award fees and costs under §1132(g)(1), as long as the fee claimant has achieved “some degree of success on the merits.” Ruckelshaus v. Sierra Club, 463 U. S. 680, 694. The bedrock principle known as the American Rule provides the relevant point of reference: Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise. E.g., id., at 683–686. This Court’s “prevailing party” precedents do not govern here because that term of art does not appear in §1132(g)(1). Instead, the Court interprets §1132(g)(1) in light of its precedents addressing statutes that deviate from the American Rule by authorizing attorney’s fees based on other criteria. Ruckelshaus, which considered a statute authorizing a fees award if the court “determines that such an award is appropriate,” 42 U. S. C. §7607(f), is the principal case in that category. Applying that decision’s interpretive approach to 29 U. S. C. §1132(g)(1), the Court first looks to “the language of the section,” 463 U. S., at 682, which unambiguously allows a court to award attorney’s fees “in its discretion … to either party.” Ruckelshaus also lays down the proper markers to guide a court in exercising that discretion. Because here, as in the statute in Ruckelshaus, Congress failed to indicate clearly that it “meant to abandon historic fee-shifting principles and intuitive notions of fairness,” 463 U. S., at 686, a fees claimant must show “some degree of success on the merits” before a court may award attorney’s fees under §1132(g)(1), see id., at 694. Hardt has satisfied that standard. Though she failed to win summary judgment on her benefits claim, the District Court nevertheless found compelling evidence that she is totally disabled and stated that it was inclined to rule in her favor. She also obtained the remand order, after which Reliance conducted the court-ordered review, reversed its decision, and awarded the benefits she sought. Accordingly, the District Court properly exercised its discretion to award Hardt attorney’s fees. Pp. 9–13.
336 Fed. Appx. 332, reversed and remanded.
Thomas, J., delivered the opinion of the Court, in which Roberts, C. J., and Scalia, Kennedy, Ginsburg, Breyer, Alito, and Sotomayor, JJ., joined, and in which Stevens, J., joined as to Parts I and II. Stevens, J., filed an opinion concurring in part and concurring in the judgment.
In most lawsuits seeking relief under the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. §1001 et seq., “a reasonable attorney’s fee and costs” are available “to either party” at the court’s “discretion.” §1132(g)(1). The Court of Appeals for the Fourth Circuit has interpreted §1132(g)(1) to require that a fee claimant be a “prevailing party” before he may seek a fees award. We reject this interpretation as contrary to §1132(g)(1)’s plain text. We hold instead that a court “in its discretion” may award fees and costs “to either party,” ibid., as long as the fee claimant has achieved “some degree of success on the merits,” Ruckels- haus v. Sierra Club, 463 U. S. 680, 694 (1983).
Hardt appeared for the updated evaluation in December 2005, and appeared for another evaluation in January 2006. The evaluators deemed both evaluations invalid because Hardt’s efforts were “submaximal.” Id., at 37a. One evaluator recorded that Hardt “refused multiple tests … for fear of nausea/illness/further pain complaints.” Ibid. (internal quotation marks omitted).
After exhausting her administrative remedies, Hardt sued Reliance in the United States District Court for the Eastern District of Virginia. She alleged that Reliance violated ERISA by wrongfully denying her claim for long-term disability benefits. See §1132(a)(1)(B). The parties filed cross-motions for summary judgment, both of which the District Court denied.
Hardt then moved for attorney’s fees and costs under §1132(g)(1). The District Court assessed her motion under the three-step framework that governed fee requests in ERISA cases under Circuit precedent. At step one of that framework, a district court asks whether the fee claimant is a “ ‘prevailing party.’ ” Id., at 15a–16a (quoting Martin v. Blue Cross & Blue Shield of Virginia, Inc., 115 F. 3d 1201, 1210 (CA4 1997), and citing Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U. S. 598, 603 (2001)). If the fee claimant qualifies as a prevailing party, the court proceeds to step two and “determin[es] whether an award of attorneys’ fees is appropriate” by examining “five factors.”[Footnote 1] App. to Pet. for Cert. 16a. Finally, if those five factors suggest that a fees award is appropriate, the court “must review the attorneys’ fees and costs requested and limit them to a reasonable amount.” Id., at 17a (citing Hensley v. Eckerhart, 461 U. S. 424, 433 (1983)).
Applying that framework, the District Court granted Hardt’s motion. It first concluded that Hardt was a prevailing party because the court’s remand order “sanctioned a material change in the legal relationship of the parties by ordering [Reliance] to conduct the type of review to which [Hardt] was entitled.” Id., at 22a. The court recognized that the order did not “sanctio[n] a certain result on remand,” but found that it “quite clearly expressed the consequences to [Reliance] were it to fail to complete its reconsideration in an expeditious manner.” Id., at 19a. Accordingly, the remand order “signif[ied] that the court was displeased with the cursory review that [Reliance] had initially given to [Hardt’s] claim, but was inclined to reserve judgment and permit [Reliance] to conduct a proper review of all of the medical evidence.” Ibid. The court next concluded that a fees award was appropriate under the five-factor test, see id., at 22a–25a, and awarded $39,149 in fees and costs, id., at 25a–30a.
Reliance appealed the fees award, and the Court of Appeals vacated the District Court’s order. According to the Court of Appeals, Hardt failed to satisfy the step-one inquiry—i.e., she failed to establish that she was a “prevailing party.” In reaching that conclusion, the Court of Appeals relied on this Court’s decision in Buckhannon, under which a fee claimant qualifies as a “prevailing party” only if he has obtained an “ ‘enforceable judgmen[t] on the merits’ ” or a “ ‘court-ordered consent decre[e].’ ” 336 Fed. Appx. 332, 335 (CA4 2009) (per curiam) (quoting 532 U. S., at 604). The Court of Appeals reasoned that because the remand order “did not require Reliance to award benefits to Hardt,” it did “not constitute an ‘enforceable judgment on the merits’ as Buckhannon requires,” thus precluding Hardt from establishing prevailing party status. 336 Fed. Appx., at 336 (brackets omitted).
Hardt filed a petition for a writ of certiorari seeking review of two aspects of the Court of Appeals’ judgment. First, did the Court of Appeals correctly conclude that §1132(g)(1) permits courts to award attorney’s fees only to a “prevailing party”?[Footnote 2] Second, did the Court of Appeals correctly identify the circumstances under which a fee claimant is entitled to attorney’s fees under §1132(g)(1)? We granted certiorari. 558 U. S. ___ (2010).
We see no reason to dwell any longer on this question, particularly given Reliance’s concessions. See Brief for Respondent 9–10 (“On its face,” §1132(g)(1) “does not expressly demand, like so many statutes, that a claimant be a ‘prevailing party’ before receiving attorney’s fees”). We therefore hold that a fee claimant need not be a “prevailing party” to be eligible for an attorney’s fees award under §1132(g)(1).
Of those statutory deviations from the American Rule, we have most often considered statutes containing an express “prevailing party” requirement. See, e.g., Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782, 792–793 (1989); Farrar v. Hobby, 506 U. S. 103, 109–114 (1992); Buckhannon, supra, at 602–606; Sole v. Wyner, 551 U. S. 74, 82–86 (2007). Our “prevailing party” precedents, however, do not govern the availability of fees awards under §1132(g)(1), because this provision does not limit the availability of attorney’s fees to the “prevailing party.” Supra, at 8–9; see also Gross, supra, at ___, (slip op., at 6) (cautioning courts “conducting statutory interpretation … ‘not to apply rules applicable under one statute to a different statute without careful and critical examination’ ” (quoting Federal Express Corp. v. Holowecki, 552 U. S. 389, 393 (2008))).
Instead, we interpret §1132(g)(1) in light of our precedents addressing statutory deviations from the American Rule that do not limit attorney’s fees awards to the “prevailing party.” In that line of precedents, Ruckelshaus is the principal case. There, the Court interpreted §307(f) of the Clean Air Act, which authorizes a court to award fees “whenever it determines that such an award is appropriate.” 42 U. S. C. §7607(f). We began by noting that because nothing in §307(f)’s text “clear[ly] show[ed]” that Congress meant to abandon the American Rule, 463 U. S., at 685, fee claimants must have achieved some litigating success to be eligible for a fees award under that section, id., at 686. We then concluded that by using the less stringent “whenever … appropriate” standard instead of the traditional “prevailing party” standard, Congress had “expand[ed] the class of parties eligible for fees awards from prevailing parties to partially prevailing parties—parties achieving some success, even if not major success.” Id., at 688. We thus held “that, absent some degree of success on the merits by the claimant, it is not ‘appropriate’ for a federal court to award attorney’s fees under §307(f).” Id., at 694.
Applying the interpretive approach we employed in Ruckelshaus to §1132(g)(1), we first look to “the language of the section,” id., at 682, which unambiguously allows a court to award attorney’s fees “in its discretion … to either party,” §1132(g)(1). Statutes vesting judges with such broad discretion are well known in the law, particularly in the attorney’s fees context. See, e.g., n. 7, supra; see also Perdue, 559 U. S., at ___ (slip op., at 14).
Reliance essentially agrees that this standard should govern fee requests under §1132(g)(1), see Brief for Respondent 13–31, but argues that Hardt has not satisfied it. Specifically, Reliance contends that a court order remanding an ERISA claim for further consideration can never constitute “some success on the merits,” even if such a remand results in an award of benefits. See id., at 34–50.
Reliance’s argument misses the point, given the facts of this case. Hardt persuaded the District Court to find that “the plan administrator has failed to comply with the ERISA guidelines” and “that Ms. Hardt did not get the kind of review to which she was entitled under applicable law.” App. to Pet. for Cert. 48a; see 29 U. S. C. §1133(2), 29 CFR §2560.503–1(h) (2009). Although Hardt failed to win summary judgment on her benefits claim, the District Court nevertheless found “compelling evidence that Ms. Hardt is totally disabled due to her neuropathy,” and stated that it was “inclined to rule in Ms. Hardt’s favor” on her benefits claim, but declined to do so before “first giving Reliance the chance to address the deficiencies in its” statutorily mandated “full and fair review” of that claim. App. to Pet. for Cert. 48a; 29 U. S. C. §1133(2). Hardt thus obtained a judicial order instructing Reliance “to act on Ms. Hardt’s application by adequately considering all the evidence” within 30 days; “[o]therwise, judgment will be issued in favor of Ms. Hardt.” App. to Pet. for Cert. 49a. After Reliance conducted that court-ordered review, and consistent with the District Court’s appraisal, Reliance reversed its decision and awarded Hardt the benefits she sought. App. 120a–123a.
These factors are: “ ‘(1) the degree of opposing parties’ culpability or bad faith; (2) ability of opposing parties to satisfy an award of attorneys’ fees; (3) whether an award of attorneys’ fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys’ 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.’ ” App. to Pet. for Cert. 16a (quoting Quesinberry v. Life Ins. Co. of North Am., 987 F. 2d 1017, 1029 (CA4 1993)).
The Courts of Appeals are divided on this issue. Some (a few only tentatively) agree with the Court of Appeals’ conclusion here that only prevailing parties are entitled to fees under §1132(g)(1). See, e.g., Cottrill v. Sparrow, Johnson & Ursillo, Inc., 100 F. 3d 220, 225 (CA1 1996) (“Congress declared that, in any ERISA claim advanced by a ‘participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee’ to the prevailing party” (emphasis added)); Tate v. Long Term Disability Plan for Salaried Employees of Champion Int’l Corp. #506, 545 F. 3d 555, 564 (CA7 2008) (“In analyzing whether attorney’s fees should be awarded to a ‘prevailing party’ in an ERISA case, a court should consider whether the losing party’s position was justified an taken in good faith. However, we have held that a claimant who is awarded a remand in an ERISA case generally is not a prevailing party in the truest sense of the term” (some internal quotation marks and citation omitted)); Graham v. Hartford Life and Accident Ins. Co., 501 F. 3d 1153, 1162 (CA10 2007) (“We also afford certain weight to prevailing party status, even though we acknowledge that the ERISA attorney’s fees provision is not expressly directed at prevailing parties”). Other Courts of Appeals have rejected or disavowed that position. See, e.g., Miller v. United Welfare Fund, 72 F. 3d 1066, 1074 (CA2 1995); Gibbs v. Gibbs, 210 F. 3d 491, 503 (CA5 2000); Freeman v. Continental Ins. Co., 996 F. 2d 1116, 1119 (CA11 1993).
See, e.g., Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U. S. 598, 601–603 (2001) (citing examples); Ruckelshaus v. Sierra Club, 463 U. S. 680, 684, n. 3 (1983) (same).
See ibid., n. 4 (citing examples).
See, e.g., 18 U. S. C. §2707(c); Ruckelshaus, supra, at 684, n. 5 (citing examples).
See Ruckelshaus, supra, at 682, n. 1 (citing examples).
See, e.g., 15 U. S. C. §§77k(e), 77www(a), 78i(e), 78r(a), 7706(g)(4); 20 U. S. C. §1415(i)(3)(B)(i); 42 U. S. C. §2000aa–6(f).
We do not foreclose the possibility that once a claimant has satisfied this requirement, and thus becomes eligible for a fees award under §1132(g)(1), a court may consider the five factors adopted by the Court of Appeals, see n. 1, supra, in deciding whether to award attorney’s fees.
Reliance has not preserved any separate objection to the reasonableness of the amount of fees awarded. See Perdue v. Kenny A., 559 U. S. ___, ___ (2010) (slip op., at 7–8, 14).
While I join the Court’s judgment and Parts I and II of its opinion, I do not believe that our mistaken interpretation of §307(f) of the Clean Air Act in Ruckelshaus v. Sierra Club, 463 U. S. 680 (1983), should be given any special weight in the interpretation of this—or any other—different statutory provision. The outcome in that closely divided case turned, to a significant extent, on a judgment about how to read the legislative history of the provision in question. Compare id., at 686–693, with id., at 703–706 (Stevens, J., dissenting). I agree with the Court in this case that 29 U. S. C. §1132(g)(1) does not impose a “prevailing party” requirement; I agree, further, that the District Court acted well within its discretion in awarding attorney’s fees to this petitioner. But I would examine the text, structure, and history of any other federal statute authorizing an award of fees before concluding that Congress intended the same approach under that statute as under this one.

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