DIAHANN L. GROSS, Plaintiff, Appellant,
SUN LIFE ASSURANCE COMPANY OF CANADA, Defendant, Appellee
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Rya W. Zobel , U.S. District Judge.
Michael D. Grabhorn, with whom Jonathan M. Feigenbaum and Grabhorn Law Office, PLLC were on brief, for appellant.
Joshua Bachrach, with whom Wilson, Elser, Moskowitz, Edelman & Dicker LLP was on brief, for appellee.
Before Thompson, Selya, and Lipez, Circuit Judges. SELYA, Circuit Judge (dissenting).
LIPEZ, Circuit Judge.
In previously deciding the merits of this case brought under the Employees Retirement Income Security Act of 1974 (" ERISA), we agreed with plaintiff Diahann Gross that our circuit should no longer apply the highly deferential " arbitrary and capricious" standard of review to certain benefits decisions. See Gross v. Sun Life Assurance Co. of Can., 734 F.3d 1, 16 (1st Cir. 2013). We also found the administrative record inadequate to permit our de novo judgment on Gross's entitlement to benefits. Accordingly, we remanded the matter for further proceedings. Gross now seeks an award of attorney's fees under 29 U.S.C. § 1132(g)(1) on the ground that she achieved " some degree of success on the merits." See Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 245, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983)). Appellee Sun Life Assurance Company of Canada contends that Gross is not entitled to attorney's fees and that, in any event, her request is premature.
We conclude that our prior decision afforded Gross a degree of success on the merits that qualifies her for an award of fees. Further, we find that such an award is both appropriate and properly ordered at this time. Hence, we remit Gross's fee request to the district court for a determination in the first instance of the proper amount of the award.
A. Factual Background
We summarize the facts underlying Gross's disability claim only briefly here, as they are presented in detail in our earlier opinion. Gross was placed on disability leave at the age of 34 based on her complaints of severe pain, weakness, and numbness in her arms and legs, as well as recurring headaches. Her treating physician attributed the symptoms to various medical conditions, including fibromyalgia and reflex sympathetic dystrophy, and concluded that Gross was unable to work. In denying long-term disability benefits to Gross, Sun Life relied heavily on video surveillance that showed Gross engaged in activities that appeared inconsistent with her self-described physical limitations.
In her appeal to this court, Gross raised two substantial threshold questions concerning her claim for disability benefits. We rejected one -- applicability of the so-called " safe harbor exception" to ERISA coverage -- but agreed with Gross's assertion that policy language " requiring proof of disability 'satisfactory to us' is inadequate to confer the discretionary authority that would trigger deferential review" of the insurer's benefits decision. 734 F.3d at 3. The latter holding departed from our holding a decade earlier in Brigham v. Sun Life of Canada, 317 F.3d 72 (1st Cir. 2003), and thus changed the law in this circuit governing policies with the " satisfactory to us" language. As directly applied to Gross's case, the decision withdrew from Sun Life the right to make a judgment about her eligibility for benefits
that is subject to review only for abuse of discretion.
We also concluded that the administrative record was " inadequate to allow a full and fair assessment of Gross's entitlement to disability benefits," and therefore remanded the case to allow further development of the evidence. 734 F.3d at 3-4. In so ruling, we faulted Sun Life for failing to provide its independent medical consultant with important background about Gross's circumstances on a critical surveillance day and for disregarding the consultant's observation that it " 'might be beneficial'" to reexamine Gross in light of the seeming inconsistences between his prior evaluation and the surveillance. Id. at 26-27;
see also id. at 27 (" Sun Life's handling of the inconsistencies between the medical reports and the video surveillance . . . raises a legitimate question about whether Sun Life has made a bona fide effort to determine Gross's capabilities." ).
At the same time, however, we recognized that Gross, despite her burden to prove disability, had not submitted a statement from her own doctor explaining why she was shown in the surveillance video performing activities that appeared beyond her self-reported capabilities. We therefore ordered a remand " so that the parties can further address both the significance of the video evidence in assessing Gross's limitations and the veracity of her self-reported and observed symptoms." Id. at 27-28.
Gross subsequently filed the motion that is now before us seeking an award of attorney's fees and costs for the litigation in the district court and on appeal. As noted, Sun Life contends that Gross is not yet eligible for a fee award.
B. Eligibility for Fee Award
(1) Legal Background
Under ERISA, a court " in its discretion may allow a reasonable attorney's fee and costs of action to either party" in a benefits proceeding. 29 U.S.C. § 1132(g)(1). In Hardt, the Supreme Court clarified that eligibility for an award under section 1132(g)(1) does not require that the fee-seeker be a prevailing party, but only that the " claimant show 'some degree of success on the merits.'" Gastronomical Workers Union Local 610 & Metro. Hotel Ass'n Pension Fund v. Dorado Beach Hotel Corp., 617 F.3d 54, 66 (1st Cir. 2010) (quoting Hardt, 560 U.S. at 255). The favorable result must be more than a " trivial success" or " a purely procedural victory," but it is enough " if the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether a particular party's success was 'substantial' or occurred on a 'central issue.'" Hardt, 560 U.S. at 255 (internal quotation marks omitted) (brackets omitted). We have described
such success as a " merits outcome [that] produces some meaningful benefit for the fee-seeker." Gastronomical Workers Union, 617 F.3d at 66.
Importantly, the Supreme Court declined in Hardt to decide " whether a remand order, without more, constitutes 'some success on the merits' sufficient to make a party eligible for attorney's fees under § 1132(g)(1)." 560 U.S. at 256. In Hardt, the claimant's success had three components: (1) a remand requiring a reevaluation of her claim, (2) the district court's expressed favorable view of that claim, with a warning that the court would grant judgment for the claimant if the plan administrator did not " adequately consider all the evidence within 30 days,"
id. (internal quotation mark omitted), and (3) an eventual award of benefits by the plan administrator. The Court characterized that combination as " far more" than trivial success. Id. We thus understand the Court to be saying that circumstances less favorable than Hardt's also would meet the requisite level of success.
The question to which we now turn is whether the particular circumstances of the remand in this case satisfy the Hardt standard.
Gross maintains that she is entitled to a fee award under Hardt because she proved that Sun Life " violated her fundamental ERISA rights" and she secured a change in the standard of review for policies containing the " satisfactory to us" language. Sun Life argues that a remand on its own does not constitute success " on the merits," and it asserts that our ruling on the standard of review " can only be considered a 'purely procedural victory'" that also does not justify a fee award.
Most 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 under section 1132(g)(1). See, e.g., McKay v. Reliance Standard Life Ins. Co., 428 F.App'x 537, 546-47 (6th Cir. 2011); Barnes v. AT & T Pension Benefit Plan-Nonbargained Program, 963 F.Supp.2d 950, 962-63 (N.D. Cal. 2013); McCarthy v. Commerce Group, Inc., 831 F.Supp.2d 459, 463, 493 (D. Mass. 2011); Scott v. PNC Bank Corp. & Affiliates Long Term Disability Plan, No. WDQ-09-3239, 2011 WL 2601569, at *7 (D. Md. June 28, 2011); Olds v. Ret. Plan of Int'l Paper Co., No. 09-0192-WS-N, 2011 WL 2160264, at *2 (S.D. Ala. June 1, 2011) (citing cases); cf. Petrone v. Long Term Disability Income Plan for Choices Eligible Emps. of Johnson & Johnson & Affiliated Cos., No. 11-10720-DPW, 2014 WL 1323751, at *2 & n.1 (D. Mass. Mar. 31, 2014) (finding no need to decide whether " remand simpliciter" is enough, but noting that " the prevailing lower court wisdom appears to be that a remand of an ERISA challenge may trigger a fee award in favor of the plaintiff under § 1132(g)" ); but see, e.g., Adair v. El Pueblo Boys & Girls Ranch, Inc. Long Term Disability Plan, No. 11-cv-02749-WYD-KLM, 2013 WL 4775927, at *22 (D. Colo. Sept. 5, 2013) (stating that plaintiff may renew her request for attorney's fees if she achieves success on remand); McCollum v. Life Ins. Co. of N. Am., No. 10-11471, 2013 WL 308978, at *1 (E.D. Mich. Jan. 25, 2013) (holding that plaintiff " has not yet achieved any 'degree of success on the merits'" where case was remanded for " full and fair review of Plaintiff's claim for disability benefits" ); Vivas
v. Hartford Life and Accident Ins. Co.,
No. 10-22992-CIV, 2013 WL 5226720, at *3 (S.D. Fla. June 17, 2013) (concluding that remand to the plan administrator " is a purely procedural victory that does not rise to Hardt's standard requiring a finding of 'some success on the merits'" ).
Among other factors, the courts concluding that remand simpliciter is enough have emphasized that a remand for further administrative proceedings commonly results from a substantive review of the evidence -- i.e., " the court considers the merits of the case and reaches it[s] conclusion on that basis." Scott, 2011 WL 2601569, at *8 (emphasis added). Hence, these courts treat such a remand as sufficient " success" under Hardt based on the two positive outcomes inherent in such an order: (1) a finding that the administrative assessment of the claim was in some way deficient, and (2) the plaintiff's renewed opportunity to obtain benefits or compensation. See, e.g., McKay, 428 F.App'x at 546-47; Barnes, 963 F.Supp.2d at 962; Spradley v. Owens-Illinois Hourly Emples. Welfare Benefit Plan, No. CIV-09-460-RAW, 2011 WL 209164, at *1 (E.D. Okla. Jan. 21, 2011); Olds, 2011 WL 2160264, at *3; Bowers v. Hartford Life & Accident Ins. Co., No. 2:09-CV-290, 2010 WL 4117515, at *2 (S.D. Ohio Oct. 19, 2010).
As explained below, it is unnecessary for us to adopt a position on whether remand alone is enough to trigger fees eligibility. Nonetheless, 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. See 29 U.S.C. § 1133(2) (stating that participants in ERISA benefit plans are entitled to " a full and fair review by the appropriate named fiduciary of the decision denying the claim" ). Here, for example, we observed that Gross had submitted sufficient medical evidence that, " if credited, is adequate to prove [her] entitlement to disability benefits." 734 F.3d at 22. In complying with our remand instructions, the district court has now ordered Sun Life to render a new decision that includes reconsideration of videotape evidence that was not fairly examined during the original administrative process. See Case No. 1:09-cv-11678-RWZ, Dkt. 65 (Apr. 16, 2014). The substance of the claim was thus a central concern in the appeal, and it will be the focus of the proceedings on remand.
To the extent Sun Life argues that an award of some amount of benefits is a necessary component of the success required by Hardt, we are unpersuaded. The Supreme Court easily could have identified Hardt's eventual benefits award as a condition of her entitlement to attorney's fees, but it did not do so. Hence, in our view, the Court's reservation of judgment about " a remand order, without more" cannot mean that the " more," in every case, must include the eventual receipt of benefits in some amount. Indeed, a remand for a second look at the merits of her benefits ...