Academic journal article South Dakota Law Review

Hardt V. Reliance Standard Life Insurance Co.: Breathing New Life into Claimants' Ability to Obtain Attorney's Fees under ERISA's Civil Enforcement Provision

Academic journal article South Dakota Law Review

Hardt V. Reliance Standard Life Insurance Co.: Breathing New Life into Claimants' Ability to Obtain Attorney's Fees under ERISA's Civil Enforcement Provision

Article excerpt

In Hardt v. Reliance Standard Life Insurance Co., the United States Supreme Court interpreted the statutory language of 29 U.S.C. section 1132(g)(1) to clarify that a court, in its discretion, may now grant a party's motion for attorney's fees when the party has achieved "some degree of success on the merits" in his or her case. The Court's decision was correct in adopting this less strenuous test rather than requiring prevailing party status before attorney's fees can be awarded. Additionally, under application of this less arduous test, the Court correctly concluded that Hardt was entitled to attorney's fees because remand of her case equated to some degree of success. The Court's adoption of the "some degree of success on the merits" standard was correct because this standard is consistent with the civil enforcement provision and express goals of the Employee Retirement Income Security Act ("ERISA") and deters plan administrators from using questionable practices in their review of claims for benefits.

I. INTRODUCTION

Generally, in civil litigation each party is responsible for his or her own attorney's fees. (1) However, the burden of paying fees may be shifted by statute. (2) Prior to the United States Supreme Court's ruling in Hardt v. Reliance Standard Life Insurance Co., (3) the federal circuits were split as to when to allow awards of attorney's fees when the underlying statute requires that the award be appropriate or within the court's discretion. (4) Importantly, several of the Federal Courts of Appeals prior to Hardt required that a party be a "prevailing party" before an award of attorney's fees was deemed appropriate. (5)

In Hardt, the United States Supreme Court reversed the Fourth Circuit's decision to deny attorney's fees to a woman who had been denied long-term disability insurance benefits under her employer's welfare benefits plan. (6) Although Hardt's motion for summary judgment was denied by the district court, she did secure a remand for reconsideration. (7) Moreover, the district court gave Reliance a firm warning that if it did not consider all of the evidence regarding Hardt's health upon remand, the district court would be inclined to rule for Hardt. (8) Not surprisingly, upon reconsideration, Reliance granted Hardt's long-term benefits. (9) Hardt then sought relief under section 1132(g)(1) for an award of attorney's fees. (10) The district court granted Hardt's attorney's fees, but the Fourth Circuit Court of Appeals reversed, finding that Hardt had not been a prevailing party and, therefore, was ineligible to receive the attorney's fees award. (11)

In deciding Hardt, the United States Supreme Court looked to its prior case law regarding fee-shifting statutes. (12) The Court rejected the lower federal court's requirement that Hardt must be a prevailing party before an award of attorney's fees would be appropriate. (13) Instead, the Court followed Ruckelshaus v. Sierra Club, (14) and found that Hardt was entitled to an award of attorney's fees under ERISA because she had achieved "some degree of success on the merits" in her case. (15)

This casenote will first explain the circumstances of Hardt, including the facts surrounding the issues that led to the appeal before the nation's highest court. (16) Next, this casenote examines the background of ERISA procedures for judicial review (17) and ERISA's civil enforcement provision. (18) The next portion of the background section examines the development of the Ruckelshaus standard of "some degree of success on the merits." (19) The final sections of the background examine the development of the five-factor test (20) and the resulting pre-Hardt split of opinion among the Federal Circuit Courts regarding when attorney's fees should be awarded under ERISA. (21) Lastly, and most importantly, the analysis will illustrate why the United States Supreme Court's holding was correct based on the express language of ERISA's civil enforcement provision, (22) as well as the express goals underlying ERISA. …

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