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Basham v. Prudential Insurance Co. of America

United States District Court, Western District of Kentucky, Louisville

December 15, 2014

Denise R. BASHAM, PLAINTIFF
v.
PRUDENTIAL INSURANCE COMPANY of AMERICA DEFENDANT

MEMORANDUM OPINION

Charles R. Simpson III, Senior Judge

This matter is before the Court on motion of Plaintiff, Denise R. Basham (“Basham”), for attorney fees pursuant to 29 U.S.C. § 1132(g)(1) following this Court’s order of remand to Defendant, Prudential Insurance Company of America (“Prudential”), for a full and fair review of Basham’s Long-Term Disability (“LTD”) claim. DN 88; DN 87. For the reasons set forth below, we will grant Plaintiff’s motion.

I. Background

The facts of this case were set forth in this Court's prior “Memorandum Opinion and Order Denying Plaintiff’s Motion for Judgment as a Matter of Law and Remanding the Matter for Full and Fair Review” on February 4, 2014. DN 87; Basham v. Prudential Ins. Co. of Am., No. 3:11-CV-00464-CRS, 2014 WL 708491 (W.D. Ky. Feb. 24, 2014). In that opinion, the Court denied Plaintiff's motion for judgment but found that Plaintiff had properly filed an LTD claim that Defendant never rendered a decision on in violation of 29 C.F.R. §§ 2560.503-1(f)(3), 2560.503-1(g). We accordingly remanded the matter to Prudential for full and fair review of the LTD claim. In the present motion, Plaintiff requests an award of attorney fees and costs based on our decision to remand and pursuant to 29 U.S.C. § 1132(g).

II. May the Court Allow Reasonable Attorney Fees and Costs in this ERISA Action?

We begin with ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1), which provides that, when a plan participant is successful in an action such as this one, “the court in its discretion may allow a reasonable attorney's fee and costs of action to either party.” (emphasis added). This discretion is not unlimited, however, as the Supreme Court has laid down “proper markers” to guide a court in determining how successful the plan participant must be. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255, 130 S.Ct. 2149, 2158, 176 L.Ed.2d 998 (2010).

In Hardt, the Supreme Court ruled that a court may award attorney’s fees under this provision only if a claimant has shown “some degree of success on the merits.” Id. (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983)). It expounded:

A claimant does not satisfy th[e some-degree-of-success] requirement by achieving “trivial success on the merits” or a “purely procedural victor[y], ” but does satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a “lengthy inquir[y] into the question whether a particular party's success was ‘substantial’ or occurred on a ‘central issue.’”

Id. (quoting Ruckelshaus, 463 U.S. at 688, n. 9, 103 S.Ct. 3274). Nevertheless, the Court did not decide “whether a remand order, without more, constitutes some success on the merits under this standard.” Id. at 256. And because the current action ultimately resulted in “a remand order, without more, ” this issue is central to Basham’s request for attorney fees and costs.

Fortunately for Basham, courts within the Sixth Circuit are willing to find that a remand order constitutes “some success on the merits.” See Thies v. Life Ins. Co. of N. Am., 839 F.Supp.2d 886, 890-91 (W.D. Ky. 2012) (“In the Sixth Circuit, a remand, alone, constitutes ‘some success on the merits.’”); Bellefleur v. Hayman Co., No. 11-13155, 2013 WL 3771373, at *4 (E.D. Mich. July 17, 2013); Hayden v. Martin Marietta Materials, Inc., No. 5:11-CV-00116, 2012 WL 5362871, at *3 (W.D. Ky. Oct. 31, 2012); Mullins v. Prudential Ins. Co. of Am., No. 3:09-CV-371-S, 2012 WL 1067898, at *3 (W.D. Ky. Mar. 29, 2012); Potter v. SABIC Innovative Plastics US, LLC, 2011 WL 4852334, *3, 2011 U.S. Dist. LEXIS 118604, *7 (S.D. Ohio 2011); Bio–Medical Applications of Ky., Inc. v. Coal Exclusive Co., LLC, 2011 WL 3568249, *2, 2011 U.S. Dist. LEXIS 91187, *7 (E.D. Ky. 2011); Bowers v. Hartford Life & Accident Ins. Co., 2010 WL 4117515, *2, 2010 U.S. Dist. LEXIS 114663, *6 (S.D. Ohio 2010). More succinctly stated, they have held that a claimant achieves “some degree of success on the merits” by obtaining a remand based on an administrator’s failure to comply with ERISA guidelines. Potter, 2011 WL 4852334, at *3 (citing McKay v. Reliance Standard Life Ins. Co., 428 F.App'x 537, 546 (6th Cir. 2011)). And thus, bolstered by the reality that it was Prudential’s failure to respect its own “Disability Claims Instructions” that necessitated this litigation and the attendant fees in question, we see no reason to depart from these cases. See Elliott v. Metro. Life Ins. Co., No. CIV.A. 04-174-DLB, 2007 WL 1558519, at *1 (E.D. Ky. May 29, 2007). Our remand order constitutes some success on the merits for Basham.

Notwithstanding this pattern, Prudential asks the Court to adopt a wait-and-see approach that would have us withhold resolution of the attorney-fees issue until we know the outcome of her underlying claim Basham for disability benefits. DN 91, p. 3. Yet, the cases Prudential cites in advocating for this method are doubtful in their applicability or value here. See McQueary v. Conway, 614 F.3d 591, 601 (6th Cir. 2010) (a pre-Hardt decision discussing attorney fees under 42 U.S.C.A. §§ 1983, 1988(b)); McCollum v. Life Ins. Co. of N. Am., No. 10-11471, 2013 WL 308978, at *1 (E.D. Mich. Jan. 25, 2013). In contrast, we find it the better view that a claimant has seen “success on the merits” if her case is remanded for further consideration, regardless of her ultimate eligibility for benefits. McKay, 428 F.App'x at 546. The appropriate inquiry is whether she succeeded on the merits of her appeal to this Court, not on an underlying claim we do not here decide. To that end, our holding that Prudential violated ERISA regulations and that a remand is appropriate governs the outcome here.

In short, that we have remanded Basham’s LTD claim for “full and fair review” is sufficient to warrant a finding that she has obtained “some degree of success on the merits.” Therefore, Hardt dictates that we may consider an award of attorney fees and costs in this case, and we will decide whether to do so below.

III. Will the Court Allow Reasonable Attorney Fees and Costs in this Action?

After a court determines that it may appropriately award attorney fees in a case before it, it should consider the following ...


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