A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

The Supreme Court ruled unanimously in Hardt v. Reliance Standard Life Ins. Co. that workers suing over disability benefits under ERISA may win attorney’s fees if they obtain “some degree of success on the merits.”

This decision overturned a Fourth Circuit decision holding that the worker must be the prevailing party in order to win a fee award–a tougher standard to meet.

The plaintiff in the case, Bridget Hardt, incurred $58,920 in legal fees in order to obtain disability benefits of $55,250.

She was an executive assistant who was diagnosed with carpal tunnel syndrome and had to stop working. The disability plan was a group plan administered by her employer and subject to ERISA, however, Reliance Standard Life Insurance Company makes the determination if a claimant qualified for benefits and underwrites any benefits awarded.

After Hardt’s application was denied, she pursued an administrative appeal. She also was awarded Social Security Disability Benefits. Hardt was finally given benefits by Reliance, but they were later stopped, and, after exhausting her administrative remedies, Hardt filed suit in district court alleging ERISA violations. Finding errors in Reliance’s review of the case, the district court instructed it to adequately reevaluate it, observing that there was compelling evidence that Hardt was totally disabled.

This was a hint – give Hardt her benefits. And Reliance paid her the $55,250 in accrued, past due benefits. Hardt then moved for attorney’s fees and costs under section 1132(g)(1).

The court’s holding is that: “a court ‘in its discretion’ may award fees and costs ‘to either party,’ as long as the fee claimant has achieved ‘some degree of success on the merits.'”¬† The court observed that the words “prevailing party” do not appear in section 1132(g)(1)’s text. Rather, the court has discretion to award fees to either party. A party cannot be awarded fees from a trivial success or a purely procedural victory, said the court–and Hardt, it found, had satisfied the standard given that the district court found compelling evidence that she was disabled, said it was inclined to rule in her favor, and sent the matter back to Reliance for reevaluation.

This was an opinion by Justice Thomas who almost always sides with corporations. But hey, it’s a victory that we here at The Life Insurance Lawyer will gladly take!

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