Opinion ID: 1237181
Heading Depth: 2
Heading Rank: 3

Heading: Relative Merits

Text: The district court did not explain why the relative merits militated in favor of a fee award, apparently assuming that this Chambless factor favored plaintiffs in view of the pre-settlement ERISA liability ruling. This assumption was error. Throughout this litigation, Honeywell has vigorously contested whether the Guaranty of benefits given by its predecessor-in-interest constitutes an employee welfare benefit plan. On appeal after the district court granted summary judgment in favor of plaintiffs on the ERISA claim, we concluded that Honeywell's obligation under the Guaranty was an ordinary contractual promise to guarantee stable benefit levels by paying insurance premiums if the employees' benefits fell below a certain level. See LaForest v. Former Clean Air Holding Co., 376 F.3d 48, 53 (2d Cir.2004). It is difficult to reconcile this finding with the conclusion that Honeywell is an employer for purposes of ERISA. See Greenblatt, 68 F.3d at 575-76 (holding that a surety does not become an employer based on its contractual obligation to guarantee[ ] an employer's ERISA obligations). In its decision granting an attorney's fee, the district court declined to reconsider the very good question of whether this is an ERISA case. That refusal was justified insofar as Honeywell waived the right to relitigate the order granting summary judgment under ERISA. See Maj. Op. at 73-74 (citing Doyle v. Kamenkowitz, 114 F.3d 371 (2d Cir.1997)). But the district court was not deprived of the opportunityor relieved of the obligation to assess the strength of the parties' arguments in weighing the relative merits Chambless factor. We stated in a prior decision in this case that if the district court's decision regarding Honeywell's ERISA liability was in error ..., the pending motion for fees and costs would provide the district court with an opportunity for `self-correction.' See Honeywell Int'l, Inc. v. Purolator Prods. Co., 468 F.3d 162, 164 (2d Cir.2006) (quoting In re Grand Jury Proceedings, 827 F.2d 868, 871 (2d Cir.1987)). Viewed indulgently, this factor presents a close question. But a close question is insufficient to justify a fee award, because the remaining factors weigh heavily in Honeywell's favor.