Gross v. Sun Life Assur. Co. of Canada, 763 F.3d 73 (1st Cir. 2014), a divided decision, concerned the question whether a remand by the First Circuit to the administrator qualified for an award of attorneys’ fees. In a prior decision, Gross v. Sun Life Assur. Co. of Canada, 734 F.3d 1 (1st Cir. 2013), the court had accepted plaintiff’s argument that deferential review was not triggered by plan language requiring that proof of disability be “satisfactory to” the insurer. Gross 2013 also found that the administrative record was inadequate to assess plaintiff’s entitlement to benefits, and remanded to the administrator. Plaintiff then apparently filed a motion with the First Circuit seeking attorneys’ fees for the litigation in the district court and on appeal, leading to Gross 2014.
The court first noted that Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), expressly declined to decide whether a remand order, without more, is “some success on the merits[.]” However, “[m]ost courts considering the question left unanswered in Hardt have held that a remand to the plan administrator for review of a claimant’s entitlement to benefits, even without guidance favoring an award of benefits or an actual grant of benefits, is sufficient success on the merits to establish eligibility for fees [citing Sixth Circuit and several district court decisions]” Though the court held that it did not need to determine whether a remand, alone, was sufficient, it stated that “we find the majority position persuasive. 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.”
The court stated that it was “unpersuaded” that “an award of some amount of benefits is a necessary component of the success required by Hardt[.]” The majority also rejected the dissenting view that a remand without an award of benefits could justify an award of fees only if the remand followed an explicit finding of a violation of ERISA: “When an ERISA beneficiary has earned a second look at her claim based on a deficient first review, her success can be equally consequential whether or not the identified flaw is explicitly linked by the remanding court to a statute or regulation.”
As noted, however, the court held that it did not need to determine whether a bare remand was sufficient, because Gross 2013 “made a substantive ruling on the standard of review that altered the dynamic between Sun Life and Gross in the subsequent proceedings[,]” and “increased the likelihood of a favorable benefits determination – perhaps from Sun Life, and certainly from a reviewing court[.]”
Again addressing a point raised in dissent, the majority held that it would not violate Hardt to award fees even if Gross 2013 had (instead of remanding) upheld the denial of benefits on de novo review after upholding plaintiff’s argument that de novo standard was required: “The fact that a claimant’s success and the denial of benefits might be combined in a single decision does not change the quantum of success achieved and, hence, provides no reason to alter our approach. … Contrary to our colleague’s implication, there is nothing incongruous about rewarding only the successful portion of a mixed decision.” A failure to recover benefits would be a relevant factor in determining a reasonable fee, but it is not a bar to a fee award.
Next, the court rejected Sun Life’s argument that the request for fees was not ripe, and should await a final determination on plaintiff’s benefit claim. The court held that Gross 2013 was final (unaffected by Gross 2014), and the outcome of the remand will not change plaintiff’s eligibility for fees for the phase of the case culminating in Gross 2013. Though the court acknowledged that it might not be ideal to have “piecemeal fees litigation,” it “decline[d] to prioritize marginal efficiency over the possibility of better access to skilled counsel for ERISA claimants” that would be a potential result of “compensating … attorneys along the way[.]”
The court then applied the traditional five-factor test, and determined that plaintiff was entitled to fees, and remanded to the district court to determine the amount of an appropriate award.