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“Some success” enough to recover attorney fees in Hardt

Below, Connor Williams of Stanford Law School recaps yesterday’s opinion in Hardt v. Reliance Standard Life Insurance Co. (09-448).  (Kyle Maurer’s recap of the oral arguments in the case is available here.)  Check the Hardt page on SCOTUSwiki for additional information.

On Monday the Court issued its opinion in No. 09-448, Hardt v. Reliance Standard Life Insurance Co., argued on April 26.  In an opinion by Justice Thomas that was joined in full by seven other members of the Court, and in which Justice Stevens concurred in part and concurred in the judgment, the Court held that a party who seeks to recover attorney’s fees in an ERISA case does not need to be a “prevailing party.”  Instead, the Court explained (in a thirteen-page opinion, over half of which was devoted to the facts and procedural history of the case), a court may award fees and costs under the statute if the claimant has achieved “some degree of success on the merits.”

The text of 29 U.S.C. § 1132(g)(1), a fee-shifting statute that applies in most ERISA suits, provides that “the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.”  The statute does not, as the Court noted at the beginning of its analysis, contain the words “prevailing party.”  Nor, the Court continued, does anything else in the text of the statute suggest such a limitation on fee claims; to the contrary, the Court highlighted the contrast between Section 1132(g)(1) of ERISA which grants courts discretion to award fees “to either party,” and Section 1132(g)(2), which limits recovery to plaintiffs who obtain a favorable judgment.  “The contrast between these two paragraphs,” the Court reasoned, “makes clear that Congress knows how to impose express limits on the availability of attorney’s fees in ERISA cases” – which it declined to do in Section 1132(g)(1).  The Court thus rebuked the Fourth Circuit for issuing an opinion that “more closely resembles ‘invent[ing] a statute rather than interpret[ing] one.’”

The Court next turned to the task of defining the circumstances in which fees should be granted under Section 1132(g)(1).  Explaining that the statute modifies the traditional American Rule requiring each party to pay his own fees but fails to incorporate the traditional “prevailing party” requirement, the Court relied on its decision in Ruckelshaus v. Sierra Club (1983), which established a more lenient fee-shifting standard that would allow a party to recover as long as it “achiev[ed] some success” on the merits.  Applying this standard, the Court concluded that Hardt had indeed achieved “some success”: the district court’s judicial order providing that a judgment would be issued in her favor unless respondent acted within thirty days met that threshold.

Justice Stevens authored a brief concurring opinion that was most notable for its vehement opposition to the Court’s reliance on Ruckelshaus, which he characterized as a “mistaken interpretation of . . . the Clean Air Act” that rested significantly on the legislative history of the provision.  Thus, Stevens expressed skepticism that the Court’s interpretation in Ruckelshaus “should be given any special weight in the interpretation of this – or any other – different statutory provision.”  Although he ultimately agreed with the outcome of this case, Stevens made clear that he would prefer to rely on “any other federal statute authorizing an award of fees” before relying on the holding in Ruckelshaus.

It is worth noting the narrow, fact-bound nature of the Court’s ruling in Hardt.  Even respondents “essentially agree[d]” that the Ruckelshaus standard should govern the case – the Court was basically tasked with fleshing out an existing standard based on the facts presented.  But it took pains to limit the import of its decision to the specific type of order issued by the district court: “Because these conclusions resolve this case, we need not decide today whether a remand order, without more,” also satisfies fee claims under Section 1132(g)(1).  This language, particularly when coupled with the earlier rebuke of the Fourth Circuit and the overall brevity of the opinion, suggests that the Court granted certiorari primarily to engage in straightforward error correction of a lower court.