May 23, 2017
ERISA allows for recovery of attorney fees and costs to any litigant based on the court's discretion. So how does a court exercise that discretion?
The federal Circuit courts of appeals, the level just below the U.S. Supreme Court, have almost uniformly adopted a five factor test for evaluating whether attorney fees should be awarded in ERISA cases. You can see the factors listed on pp. 12-13 in the Toman decision in the library section of this website. However, the factors do not necessarily favor an award of fees to prevailing plaintiffs. In fact, in Toman, the court declined to award fees to the prevailing plaintiff even though it concluded that the insurer was not only wrong in denying a claim but was downright unreasonable: arbitrary and capricious in ERISA language.
But the Ninth Circuit has in place, in addition to the five factors, a presumption that prevailing plaintiffs in ERISA cases are entitled to an award of attorney fees. See, e.g., Canseco v. Construction Laborers Pension Trust for Southern California, 93 F.3d 600, 609-10 (9th Cir. 1996). The Ninth Circuit is not alone on this issue, but it is in the minority. Most Circuits simply apply the five factors without any presumption. But if you're representing plaintiffs, it's a very helpful thing to be able to know that if you win you'll probably be getting an award of attorney fees and costs too.
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