In Gorbacheva v. Abbott Laboratories Extended Disability Plan, et al., 29 U.S. App. LEXIS 36542 (N.D. Cal. Dec. 10, 2019), the Ninth Circuit reversed a district court's award of attorneys' fees to an ERISA claimant as excessive because she had rejected a reasonable settlement offer.

Under ERISA, a claimant may receive attorneys' fees if he or she obtains some degree of success on the merits. The Gorbacheva court granted the defendant's motion for summary judgment on an ERISA disability claim because it determined that the plan administrator had not abused its discretion by denying a claim based on an ambiguous medical record. It also awarded attorneys' fees to the plaintiff because she had obtained an earlier remand for further consideration of her ERISA claim.

The Ninth Circuit determined that an award of fees would be appropriate for this limited success. However, it found the district court's award of all fees incurred in achieving the remand to be unreasonable because plaintiff had previously declined defendant's offer to remand the matter so that the plan could consider additional evidence. As the Ninth Circuit noted, the district court's remand order "was nearly identical to the settlement offer and contained no additional benefit."

Thus, the Ninth Circuit held the district court had abused its discretion by awarding plaintiff attorneys' fees for hours expended after she had rejected the plan's offer. The court remanded the matter to allow the district court to re-calculate the fee award to include only those fees incurred prior to her rejection of the settlement offer.

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