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Hardt v. Reliance Standard Life Insurance Co.

Attorney's Fees Can Be Awarded to a Participant When a Court Orders the Plan Administrator to Rehear the Claim

In a ruling strengthening pension plan participants' ability to get their claims heard in court, the U.S. Supreme Court reversed a lower court's refusal to award attorney's  fees to a participant even though she won her case when a court sent it back to the administrator. AARP, along with the National Employment Lawyers Association, had filed a "friend of the court" brief in Hardt v. Reliance Standard Life Insurance Co. urging this result.

Ruling unanimously, the Court rejected the plan's argument that allowing attorney's fees when an administrator is required to rehear the participant's claim does not meet the federal law's implicit requirement that the participant achieve "some degree of success on the merits."

The Dispute


Bridget  Hardt  began to experience symptoms of carpal tunnel syndrome in 2000 when she was working as an executive assistant to the president of Dan River. She stopped working in January 2003. In August 2003,  Hardt  requested long-term disability benefits under a Dan River plan. Although Dan River administered the plan, Reliance  was the insurer, which was charged with determining whether a claimant was eligible for benefits.  Reliance  initially rejected Hardt's disability claim — and then approved it. In March 2006, Reliance advised  Hardt  that the Dan River plan provided benefits after 24 months only to individuals who were totally disabled from performing all occupations. Even though the Social Security Administration had found  Hardt  disabled under the Social Security Act,  Hardt  was advised that her Dan River disability payments would cease.
 
Hardt  exhausted her administrative appeal remedies under the plan and filed an action in the U.S. District Court for the Eastern District of Virginia, invoking the protections of the federal Employee Retirement Income Security Act (ERISA), the main federal law governing employee benefits. The court found that the denial of benefits was wrongful and remanded the claim for further consideration by  Reliance . If Reliance did not adequately consider all evidence within 30 days, the court held, "judgment will be issued in favor of Ms.  Hardt ."

On remand,  Hardt  provided additional information to  Reliance , which then awarded her long-term disability benefits.  Hardt  filed a motion for attorney's  fees with the federal District Court, which awarded her about $40,000.  Reliance  appealed. The U.S. Court of Appeals for the Fourth Circuit reversed, finding that the District Court's order remanding Hardt's claim for benefits to  Reliance  did not make  Hardt  a "prevailing party" for purposes of an award of attorney's  fees under ERISA, even though following that remand,  Reliance  reversed its position and awarded benefits to  Hardt .


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