You have seen this issue before:  The court remands the ERISA-governed long term disability claim for further consideration by the claims administrator because the administrative record was insufficient for de novo review.

Is a court’s remand for further review of an ERISA-governed claim by the claims administrator a sufficient “degree of success on the merits” to qualify for an award of attorney fees and costs?

Is merely “surviving to fight another day” the same as winning the war or winning a significant battle?   Maybe so.

Here’s the case of Gross v. Sun Life Assurance Company of Canada, __ F.3d __ (1st Cir. Slip. Op. August 14, 2014) (PDF).

You should read this opinion, and the dissenting opinion, because it outlines arguments (and cites the cases nationally) on both sides of the issue…

FACTS:  Gross, age 34, claimed fibromyalgia disabled her and she sought long term disability benefits.  The claim was denied based in part on surveillance.  The court held that de novo review applied, but remanded to the claims administrator because the administrative record was insufficient for de novo review. Plaintiff’s counsel sought $261,000+ in fees and costs.

FIRST CIRCUIT HELD:  (Split decision with dissenting opinion)

  1. “Under ERISA, a court ‘in its discretion may allow a reasonable attorney’s fee and costs to either party’ in a benefits proceeding.  Op. at 5.
  2. To obtain fees the fee-seeker does not have to show she is a “prevailing party, but only that the ‘claimant show[] some degree of success on the merits.’”  Op. at 5.
  3. The United States Supreme Court “declined…to decide ‘whether a remand order, without more, constitutes some degree of success on the merits’ sufficient to make a party eligible for attorney fees under [ERISA].’”  Op. a 6.
  4. “Most courts…have held that a remand to the plan administrator…is sufficient success on the merits to establish eligibility for fees….”  Op. at 7-8 (Cases cited).
  5. Some federal districts courts in Colorado, Michigan, Florida have held remand does not justify fees because remand is “a purely procedural victory” and claimant has yet to achieve any “degree of success on the merits.”  Op. at 8-9 (Cases cited).
  6. “A remand to the claims administrator for reconsideration of benefits entitlement ordinarily will reflect the court’s judgment that the plaintiff’s claim is sufficiently meritorious that it must be reevaluated fairly and fully.”  Op. at 10.
  7. The Court rejected Sun Life’s argument that an award of some amount of benefits is necessary to establish “some degree of success.”  Op. at 10-11.
  8. DISSENT: Remands alone are insufficient “success” to award fees because: “Surviving to fight another day is not the same as winning the war (or even the same as winning a significant battle).” Op. at 31.
  9. DISSENT: “[T]he merits issue in this case is whether the plaintiff is entitled to benefits (and, if so, to what extent).  As long as the plaintiff secures some benefits as a result of litigation, she will be eligible for a fee award. At [remand], however, the benefits claim is entirely up in the air.  We simply do not know whether her claim will prove to be successful in whole, in part, or not at all.“  Op. at 32. (Emph. added).