Fees ... please

A recent decision out of the Southern District illustrates the attorneys’ fees analysis applicable to ERISA cases in Florida. Plaintiff’s counsel in Smith v. Reliance Standard Life Insurance Company, successfully prosecuted a claim for long-term disability benefits, recovering $319,200 in principal plus pre-judgment interest of $72,149.

In the Eleventh Circuit, five factors are considered in determining whether to award attorneys’ fees in an ERISA case:

1. The degree of the opposing party’s culpability or bad faith;

2. The ability of the opposing party to satisfy an attorneys’ fee award;

3. Whether an award of attorneys’ fees would deter similarly situated persons;

4. Whether the parties requesting fees sought to benefit all plan participants and beneficiaries or sought to resolve a significant legal question regarding ERISA; and

5. The relative merits of the parties’ positions.

The District Court found that two factors did not favor the award of fees: there was no evidence of bad faith, and Plaintiff’s claim did not resolve a significant legal question regarding ERISA. Nonetheless, the Court awarded fees.

This case reminds us that one need not have all five fee factors present to prevail on a fees’ claim. In fact, a prevailing plaintiff in a benefits action should typically be capable of showing the defendant’s ability to pay an award, the deterrence effect of the benefits award, and the obvious merit of the plaintiff’s position. It is worth additionally noting that the Court found $300 per hour reasonable.