Hello, ERISA Watchers!  There have been quite a few good fee decisions as of late.  This week’s notable decision is a fee decision and firm victory in Benjamin v. Oxford Health Ins., Inc., __F.Supp.3d__, 2019 WL 126190 (D. Conn. Jan. 8, 2019), a matter involving denial of residential treatment for a mental and/or behavioral health disorder.  In the court’s earlier decision, Benjamin v. Oxford Health Ins., Inc., 2018 WL 3489588 (D. Conn. July 19, 2018), the court found that Plaintiff Benjamin was eligible for attorneys’ fees because the court remanded the claim to Oxford for a full and fair review.  Oxford failed to consider Plaintiff’s medical records and apply its own standards of review, including failing to conduct a Medical Necessity review.   

In the present case, the court completed its analysis of whether Plaintiff was entitled to any attorney’s fees and determined the amount of fees that should be awarded to Plaintiff’s attorneys.  At the outset, the court rejected Oxford’s argument that Plaintiff should get no fees because Plaintiff refused to accept its offer of a voluntary remand and required the parties to engage in unnecessary litigation.  Securing a remand is not a pure procedural victory.  The court noted that a similar argument was rejected in Dwinnell v. Fed. Express Long Term Disability Plan, 2017 WL 1371254 (D. Conn. Apr. 14, 2017).

Turning to the Chambless factors, the court determined that the weight of the factors support an attorney’s fee award.  

The first factor looks at a party’s bad faith or culpability, though a finding of bad faith is not necessary.  Here, Oxford’s arbitrary and capricious conduct amounts to culpability.  Though Oxford argues that the litigation could have been avoided had Plaintiff accepted the offer of a voluntary remand, the court noted in the same vein that this lawsuit could have been avoided had Oxford fully and fairly evaluated Plaintiff’s claim in the first instance.  This factor supports an award of fees.

The second factor looks at a party’s ability to satisfy an attorney’s fee award.  The parties do not dispute Oxford’s ability to pay but the court found that this factor does not weigh heavily in the court’s analysis.

The third factor considers whether an award of fees will have a deterrent effect.  The court found that this factor favors Plaintiff because an award of fees will impact Oxford’s future conduct and encourage it to fix the policies or practices which led to the mistakes in the first case.

The fourth factor considers whether the case confers a common benefit to ERISA participants or beneficiaries or seeks to resolve a significant legal question regarding ERISA.  This factor favors Oxford because Plaintiff did not seek to confer a common benefit, but this carries little weight in the court’s analysis.

The fifth factor considers the relative merits of the parties’ positions, which does weigh heavily in the Chambless test.  This factor favors Plaintiff because the court’s earlier ruling found deficiencies in Oxford’s review of Plaintiff’s insurance claim.  With three of the five factors supporting to an award of fees, the court turned to the amount of fees awardable.

In determining the rate to be awarded, the court looks at the prevailing fees in the district where the case is litigated.  The rates sought by the Kantor & Kantor attorneys, located in California, are higher than those typically awarded to attorneys in Connecticut.  To depart from the forum rule, Plaintiff must show that the use of in-district counsel would produce a substantially inferior result.  The court recognized that having counsel within the ERISA field likely produced a better result over a general litigator, but that the firm’s expertise in the area of eating disorders was not relevant to the ultimate issue decided by the court.  Looking at rates awarded to ERISA attorneys in Connecticut, the court awarded rates at the higher end of $425 (partner) and $375 (senior associate).  The court awarded fees for all the requested time, except for 5.9 hours related to work done on the attorney’s fees motion, for a total of $33,022.50 in fees and $550 in costs.

In addition to Benjamin, our firm received another favorable attorney’s fee award in Dowdy, et al. v. Metropolitan Life Insurance Company, 2019 WL 120730 (N.D. Cal. Jan. 7, 2019). In this case the Ninth Circuit reversed the district court’s grant of judgment to MetLife and found that Dowdy was entitled to a payment of AD&D benefits because the record did not support a finding that the pre-existing condition of diabetes substantially contributed to the loss of his leg.  As in Benjamin, the court found that an experienced attorney who specializes in ERISA matters justified a higher hourly rate.  The court found that “Plaintiffs are entitled to $259,380 (432.3 hours at $600 per hour) plus expenses of $7,635.16, for a total of $267,015.16 in attorneys’ fees and costs incurred at the district court.”  For the work on appeal at the Ninth Circuit in which Kantor & Kantor was involved, the court awarded a total of $215,542.50 (based on hourly rates of $700 for the K&K attorneys).  On prejudgment interest, the court applied the one-year Treasury constant maturity rate of 2.5%.

Plaintiff Benjamin is represented by Ian O. Smith, The Law Office of Ian O. Smith, LLC, and Lisa S. Kantor and Peter S. Sessions, Kantor & Kantor, LLP.

Plaintiff Dowdy is represented by Mark L. Mosley and Douglas A. Applegate, Seiler Epstein Ziegler & Applegate LLP; Glenn R. Kantor, Kantor & Kantor LLP; and Russell Petti, The Law Offices of Russell G. Petti.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Attorneys’ Fees

Second Circuit

Tedesco v. I.B.E.W. Local 1249 Insurance Fund, No. 14-CV-3367 (CS), 2019 WL 140649 (S.D.N.Y. Jan. 9, 2019) (Judge Cathy Seibel).  Under the “catalyst theory” Plaintiff has achieved some success on the merits warranting attorneys’ fees.  The court’s tentative analysis of the legal claims in an order denying summary judgment likely resulted in Plaintiff obtaining the settlement.  Defendants’ voluntary withdrawal of the overpayment counterclaim, however, is not success on the merits since there was no court action that was the impetus for the voluntary dismissal.  The court found that the Chambless factors support an award of fees.  The court found that fee rates ranging from $420-$495 an hour are reasonable in this district.  The court reduced the time requested by 25% across the board to “trim the fat from excessive fee applications.”  The court also reduced the fees to account for lack of success on three of the claims.  Total award included $127,612.97 in fees and $10,781.65 in costs.

Benjamin v. Oxford Health Ins., Inc., No. 3:16-CV-00408 (CSH), __F.Supp.3d__, 2019 WL 126190 (D. Conn. Jan. 8, 2019) (Judge Haight).  See Notable Decision summary above.

Ninth Circuit

Dowdy, et al. v. Metropolitan Life Insurance Company, No. 15-CV-03764-JST, 2019 WL 120730 (N.D. Cal. Jan. 7, 2019) (Judge Jon S. Tigar).  See Notable Decision summary above.

Breach of Fiduciary Duty

Eighth Circuit

Acosta v. Reliance Tr. Co., No. 17-CV-4540 (SRN/ECW), 2019 WL 121185 (D. Minn. Jan. 7, 2019) (Judge Susan Richard Nelson).  The court denied Reliance Trust’s renewed motion to dismiss, finding that the then majority-stakeholder (William Kuban) to whom the ESOP allegedly overpaid for a majority stake in the company’s stock, is not a necessary party under FRCP 19(a) or 21.  The court explained that Kuban is well aware of the litigation and has not sought to intervene or claim an interest in any way.  Further, “if the Court determines that the ESOP overpaid for Kuban’s stock, the ESOP (and potentially Reliance, as a signatory to the agreement) may have a contractual claim against Kuban, not the other way around.”  At this point it is unclear whether the DOL could assert any ERISA cause of action against Kuban.

Ninth Circuit

Barker v. Selway Corporation & The Selway Corporation Employee Stock Ownership Plan, No. CV-18-179-DLC, 2019 WL 109351 (D. Mont. Jan. 4, 2019) (Judge Dana L. Christensen).  The court issued an order approving the settlement and barring further claims.  It found that adequate notice was given to plan participants or beneficiaries of the ESOP plan.  The court approved the definitive settlement agreement, including payment of $5,500,000.

D.C. Circuit

Wilcox v. Georgetown Univ., No. CV 18-422 (RMC), 2019 WL 132281 (D.D.C. Jan. 8, 2019) (Judge Rosemary M. Collyer).  This is one of many cases brought all over the country related to higher education retirement plans and the allegation that they imprudently selected and retained certain investment options.  The court dismissed some of the claims based on lack of constitutional standing.  The court found that “the CREF Stock Account, with its deliberate mix of foreign and domestic investments, may not have performed as some purely domestic accounts with different investments does not indicate imprudence on the part of Defendants.”  On recordkeeping fees, the court found that Plaintiffs do not allege self-dealing between the plan’s trustees and the recordkeepers.  The court granted Defendants’ motion to dismiss.

Disability Benefit Claims

Eleventh Circuit

McCook v. Aetna Life Insurance Company, No. 3:17-CV-823-J-32MCR, 2019 WL 126211 (M.D. Fla. Jan. 8, 2019) (Judge Timothy J. Corrigan).  The court granted summary judgment to Aetna.  Though the court found that Plaintiff provided evidence that Aetna could have awarded her LTD benefits, she did not show that the denial of benefits was arbitrary and capricious.  Aetna was entitled to rely on the Dictionary of Occupational Titles to determine how Plaintiff’s occupation as a Foreclosure Specialist II was normally performed in the national economy.  Even though her job at Bank of America was stressful, this does not mean she could not perform her occupation elsewhere.


Eighth Circuit

Dapron v. Spire, Inc. Ret. Plans Comm., No. 4:17 CV 2671 JMB, 2019 WL 141376 (E.D. Mo. Jan. 9, 2019) (Magistrate Judge John M. Bodenhausen).  The court denied Plaintiff’s motion for sanctions and a second Rule 30(b)(6) deposition because it found that the deposition testimony at issue reflects a “conscientious, good-faith effort” to prepare a knowledgeable designee. The court denied Plaintiff’s motion to compel Spire to produce another decisionmaker to testify because the information that Plaintiff seeks to elicit is non-relevant, specifically, what this person knew of Plaintiff’s personal circumstances when interpreting the plan.  This person was not required to consider Plaintiff’s extenuating circumstances when interpreting the plan. 

Eleventh Circuit

Stewart v. Hartford Life & Accident Ins. Co., No. 2:17-CV-1423-KOB, __F.Supp.3d__, 2019 WL 142322 (N.D. Ala. Jan. 9, 2019) (Judge Karon Owen Bowdre).  In this dispute over denied disability and waiver of life premium benefits, the court granted Plaintiff’s motion for discovery on the following subjects:  Hartford’s potential conflict of interest, details of Hartford’s April 20, 2013 denial, Dr. DeFilippis’s appointment as medical evaluator, and the role of Hartford examiner, Ian Hardy.  The court found that this discovery would aid in reviewing de novo Hartford’s denial of WOLP claim or in assessing the impact of Hartford’s conflict of interest.

Exhaustion of Administrative Remedies

Fifth Circuit

Van Bael v. United Healthcare Services, Inc., No. CV 18-6873, 2019 WL 142298 (E.D. La. Jan. 8, 2019) (Judge Lance M. Africk).  In this dispute over the coverage of medical services, the court found that Plaintiff is excused from exhausting her administrative remedies since United Healthcare’s notification of its decision on Plaintiff’s initial appeal shows that she was not provided a meaningful dialogue or review of her claims in violation of the ERISA regulations.  The remedy for failing to substantially comply with the procedural requirements of ERISA is a remand to the plan administrator and not a substantive benefits determination by the court.  Based on the record, the court does not believe that Plaintiff is entitled to judgment as a matter of law.

Provider Claims

Second Circuit

Li Neuroscience Specialists v. Blue Cross Blue Shield of Massachusetts, No. 17-CV-06572, 2019 WL 121673 (E.D.N.Y. Jan. 7, 2019) (Judge I. Leo Glasser).  The court determined that Plaintiff lacks standing to bring this ERISA action due to the valid anti-assignment provision in the plan.  

Ninth Circuit

California Spine and Neurosurgery Institute v. Blue Cross of California, No. 18-CV-04777-PJH, 2019 WL 119970 (N.D. Cal. Jan. 7, 2019) (Judge Phyllis J. Hamilton).  The court found that Blue Cross did not waive the legal defense that Plaintiff cannot bring this ERISA claim due to the anti-assignment clause, even though it is raising that defense for the first time in litigation.  The court declined to expand Spinedex to support Plaintiff’s argument since doing so would conflict with the Ninth Circuit’s subsequent decisions in Brand Tarzana and Eden Surgical Center, which held that a plan’s anti-assignment provision – a litigation defense – need not be raised during the claim administration process.  The court also found that Defendant is not equitably estopped from enforcing the anti-assignment clause.  

Tenth Circuit

IHC Health Service, Inc. v. Swire Pacific Holdings, Inc., No. 2:18-CV-72-JNP-DBP, 2019 WL 131855 (D. Utah Jan. 8, 2019) (Judge Jill N. Parrish).  Swire is the plan’s sponsor, administrator, and named fiduciary.  The court denied dismissal of the § 1132(a)(1)(B) claim against Swire since it possesses “the final authority for the administration and interpretation of the Plan documents[,]” and is a proper defendant.  The court dismissed the breach of fiduciary duty claim under §§ 1132(a)(2) and (3) against Swire because any breach of fiduciary duty by the co-fiduciary, Regence, “is not chargeable to Swire unless the act of designating Regence, or continuing that designation, is itself a violation of Swire’s fiduciary duty.” 

Statute of Limitations

Second Circuit

Li Neuroscience Specialists v. Blue Cross Blue Shield of Massachusetts, No. 17-CV-06572, 2019 WL 121673 (E.D.N.Y. Jan. 7, 2019) (Judge I. Leo Glasser).  The court declined to find the plaintiff provider’s suit untimely based on the plan’s two-year contractual limitations period because the denial letter did not comply with the ERISA regulations requiring a final benefits determination to inform of the insured’s right to bring a judicial action.  The court dismissed the action on other grounds.

Statutory Penalties

Fifth Circuit

Van Bael v. United Healthcare Services, Inc., No. CV 18-6873, 2019 WL 160183 (E.D. La. Jan. 10, 2019) (Judge Lance M. Africk).  The court denied Plaintiff’s motion for penalties against defendant Tulane University under 29 U.S.C. § 1132(c)(1)(B).  Plaintiff sent a letter requesting a copy of “Van Bael’s UnitedHealthcare health insurance policy” but the document she sought was titled “UnitedHealthcare Choice Plus UnitedHealthcare Insurance Company Certificate of Coverage for the Health Reimbursement Account (HRA) Plan 7NE of Tulane University,” and was not provided to her for several months after her request.  Though Plaintiff did not have to request the Plan document using its precise name, the court found that Plaintiff’s request did not provide Tulane with sufficiently clear notice of the document she sought. 


Tenth Circuit

Richard T.B. v. United Healthcare Insurance Company, No. 2:18-CV-73, 2019 WL 145736 (D. Utah Jan. 9, 2019) (Judge Jill N. Parrish).  In this dispute over the coverage of mental health treatment in Utah, the court found that venue is proper in Utah where UBH has a claims-processing center in this district, but after weighing the transfer-of-venue factors the Western District of Pennsylvania is a more convenient forum.  The plan sponsor is in PA, the group policy was delivered there, and the benefits are received in PA.

Withdrawal Liability & Unpaid Contributions

Second Circuit

Trustees of the Ne. Carpenters Health, Pension, Annuity, Apprenticeship, & Labor Mgmt. Cooperation Funds v. CEI Contractors, Inc., No. 18CV3467JFBGRB, 2019 WL 117603 (E.D.N.Y. Jan. 7, 2019) (Judge Joseph F. Bianco).  “[P]etitioners’ motion to confirm the arbitration award in the amount of $279,150.66 is granted. Further, the Court awards petitioners prejudgment interest (from the date of the arbitration award through the date of judgment) at a rate of nine percent per year, $180.00 in attorney’s fees, and $475.00 in costs.”

Gesualdi v. Interstate Payroll Co., Inc., No. 214CV06780ADSSIL, 2019 WL 109379 (E.D.N.Y. Jan. 4, 2019) (Judge Arthur D. Spatt).  “Plaintiffs’ motion for summary judgment pursuant to Rule 56 is granted as to the first and second causes of action as to Interstate Payroll. The Plaintiffs are awarded the following sums: (a) $167,132.00 in withdrawal liability; (b) daily interest on the withdrawal liability at the rate of $82.42 per day from July 1, 2013 until the date of judgment; (c) daily liquidated damages on the withdrawal liability at the rate of $82.42 per day from July 1, 2013 until the date of judgment; (d) $12,580.00 in unpaid contributions; (e) interest on the unpaid contribution of $25,101.84 in addition to $6.20 per day from April 10, 2018 until the date of judgment; (f) liquidated damages on the unpaid contribution of $25,101.84 in addition to $6.20 per day from April 10, 2018 until the date of judgment; (g) $61,642.71 in attorneys’ fees and costs; and (h) $3,029.29 in audit costs and fees.”

Seventh Circuit

Building Trades United Pension Trust Fund & Scott Redman v. Pinnacle Woodwork, Inc., No. 18-CV-5-PP, 2019 WL 163121 (E.D. Wis. Jan. 10, 2019) (Judge Pamela Pepper).  The court granted Plaintiffs’ third amended motion for default judgment and ordered the clerk to enter judgment in favor of Plaintiffs against Defendant in the amount of $344,626.41, together with interest at the rate allowed by law.

Eighth Circuit

Painters District Council No. 58, et al. v. Johned, Inc. & Edward Benson, No. 4:17 CV 1271 JMB, 2019 WL 118549 (E.D. Mo. Jan. 7, 2019) (Judge Henry Edward Autrey).  “Plaintiffs’ requested recovery includes delinquent contributions, liquidated damages, audit costs, attorneys’ fees and costs incurred in this action during the period between January 1, 2015, and August 31, 2017.”  The court granted Plaintiffs’ Motion for Entry of Default Judgment and Plaintiffs are awarded default judgment against Defendants, jointly and severally, for a total of $45,687.43.

Ninth Circuit

McDonald v. Mountain W. Steel, LLC, No. CV-17-54-BU-BMM, 2019 WL 133312 (D. Mont. Jan. 8, 2019) (Judge Brian Morris).  Defendant did not respond to Plaintiff’s motion for summary judgment.  “Plaintiffs have shown that Mountain West Steel’s failure to meet its obligations is a violation of ERISA § 515, 29 U.S.C. § 1145, and a breach of Labor and Trust Agreements as set forth in Plaintiffs’ Complaint.”

Your ERISA Watch authored by Michelle L. Roberts, Esq., Partner