Attorney Fee Awards in the First Circuit

There was another important issue addressed in the First Circuit's decision this month in Janeiro, one I had planned to address in a return post on the case, involving an issue dear to the hearts of anyone who sues plans, administrators or fiduciaries for a living, namely the right to recover attorneys' fees in such a lawsuit. Before I could return to this point, however, I got sidetracked by my favorite decision of the month, Abatie v. Alta Health and Life Insurance. So I am returning to it now, before this point can get shunted to the side again by some other new development.

In Janeiro, you may recall, the defendant took a beating in the case, and the plaintiff, rightfully so under ERISA, sought to recover attorneys' fees after prevailing on his claim. The First Circuit, addressing the district court's decision not to award fees to the prevailing plaintiff, gave a nice, concise presentation of the law at this point in time in this circuit on this issue. Emphasizing that an award of attorneys' fees in such cases is entirely discretionary, the court discussed the standards governing this determination in this circuit. In key part, the court declared:

ERISA provides that attorneys' fees are available in the court's discretion. . . . We begin by noting that in an ERISA case, a prevailing plaintiff does not, merely by prevailing, create a presumption that he or she is entitled to a fee-shifting award.. . . [T]his court has listed five factors that ordinarily should guide the district court's analysis: (1) the degree of culpability or bad faith attributable to the losing party; (2) the depth of the losing party's pocket, i.e., his or her capacity to pay an award; (3) the extent (if at all) to which such an award would deter other persons acting under similar circumstances; (4) the benefit (if any) that the successful suit confers on plan participants or beneficiaries generally; and (5) the relative merit of the parties' positions. . . .This list is illustrative, not exhaustive[;]no single factor is dispositive; and indeed, not every factor in the list must be considered in every case.

The First Circuit approved of the district court's analysis of this issue, and in so doing presented the model for how to address this issue. It is fact specific, and the way to argue it to the court, and for the court to in turn consider the issue, is to address what the actual facts of the matter show on that specific case with regard to each of the five factors (recognizing, of course, that the First Circuit specifically left open the possibility that there are still more factors that could possibly be considered, and that even some of the factors specifically identified by the court may have no relevance).