When ERISA Attorneys’ Fees Survive a “Grossly Disproportionate” Challenge: Court Awards Full Fees on Partial Success in Covered Earnings Dispute

In Rushing v. Life Insurance Company of North America, No. CV 24-10088-JFW(RAOx), 2026 WL 2353337 (C.D. Cal. Aug. 13, 2026), District Judge John F. Walter granted an ERISA claimant’s motion for attorneys’ fees and costs in full, rejecting the insurer’s demand for an across-the-board 90 percent reduction and awarding $227,348.40. The decision offers a detailed application of the Hummell factors and the lodestar method in a long-term disability benefits dispute that turned on the correct calculation of Covered Earnings.

What did the underlying ERISA dispute decide?

Plaintiff brought suit under ERISA challenging how LINA calculated her long-term disability benefits. There was no dispute that Plaintiff was disabled or that LINA paid benefits through the maximum benefit period. The contested issue was whether LINA correctly calculated her Covered Earnings. Plaintiff did not prevail on every argument she raised, but the Court concluded that LINA abused its discretion in calculating her Covered Earnings as to her five hours of weekly overtime, and it awarded pre-judgment interest at 10 percent because Plaintiff endured hardships from LINA’s failure to properly calculate her benefits. The judgment entered on June 12, 2026 awarded Plaintiff $31,016.65, consisting of $17,534.10 in benefits and $13,482.55 in interest.

Was the claimant eligible for an ERISA fee award?

The Court found that Plaintiff readily met the eligibility threshold. Under 29 U.S.C. § 1132(g)(1), a fee claimant need only show “some degree of success on the merits” rather than satisfy the more rigorous prevailing-party standard, citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010). Because the Court concluded that LINA abused its discretion and awarded benefits and interest, Plaintiff achieved the requisite degree of success.

How did the court apply the Hummell factors?

The Court analyzed the five Hummell factors and found they supported a fee award. It treated the first factor, LINA’s culpability or bad faith, as neutral, noting that although LINA abused its discretion, it had engaged in an ongoing, good-faith exchange of information warranting only a low level of skepticism. The second factor, LINA’s ability to satisfy an award, strongly favored fees because no evidence suggested LINA could not pay. The third factor, deterrence, favored an award because it would tend to deter LINA and other administrators from unreasonable policy interpretations. The fourth factor marginally favored Plaintiff, as the ruling would benefit other participants of the Peet’s Coffee & Tea Employee Benefits Plan and beneficiaries of similar LINA-administered plans by discouraging the improper practice of paying overtime hours at only the base rate. The fifth factor, the relative merits of the parties’ positions, favored an award because Plaintiff prevailed on the primary issue.

Were the hours claimed by plaintiff’s counsel reasonable?

The Court found the time expended reasonable. Plaintiff’s counsel at McKennon Law expended 525.2 raw hours totaling $391,890, then reduced that to 383.9 hours to account for excessive time and non-recoverable administrative work, and further reduced the dollar amount by one-third to reflect partial success, producing a combined write-off of $197,205, roughly half of the amount billed. The Court rejected LINA’s argument that the records showed duplicative billing among three attorneys, explaining that the case was staffed by one associate-level attorney and one supervising shareholder at all relevant times. Ms. Meier handled the matter from inception until she left the firm in November 2025 for health reasons, and Mr. Hoff began only after she stopped. The Court characterized Mr. McKennon’s work as supervisory rather than duplicative, citing Democratic Party of Washington State v. Reed, 388 F.3d 1281 (9th Cir. 2004). Invoking Moreno v. City of Sacramento, 534 F.3d 1106 (9th Cir. 2008), the Court observed that lawyers are unlikely to inflate hours on contingency cases and that courts should defer to the winning lawyer’s professional judgment. The Court concluded that 383.9 hours was reasonable.

What hourly rates did the court approve?

The Court approved the requested rates as reasonable, supported by Mr. McKennon’s declaration, prior court orders and settlements, and declarations from three senior ERISA practitioners outside the firm. It found LINA failed to rebut this evidence, offering only disparagement of counsel’s experience and one case with outdated 2022 rates. The Court approved hourly rates of $875 to $925 (2024-2026) for Mr. McKennon, the firm’s founding shareholder recognized as a preeminent ERISA lawyer; $750 (2024-2025) for Ms. Meier, senior litigation counsel admitted 20 years ago; and $675 (2025-2026) for Mr. Hoff, an ERISA lawyer with over 14 years of practice.

Did partial success justify reducing the fee?

The Court declined to reduce the fees further. Applying Hensley v. Eckerhart, 461 U.S. 424 (1983), it recognized that the extent of success is a crucial factor but that a fee award should not be reduced simply because a plaintiff failed to prevail on every contention. Because Plaintiff’s theories (overtime, commissions, date of disability, offsets, and standard of review) arose from a single common core, LINA’s calculation of Covered Earnings, the suit could not be treated as a series of discrete claims. Given that counsel had already discounted the request substantially to account for partial success, and given the intertwined nature of the successful and unsuccessful issues, the Court refused LINA’s requested 90 percent cut. It likewise awarded the $4,373.40 in non-statutory costs and the $405 filing fee in full, noting the costs arose from the same common core and that the largest cost, a $2,675 mediation fee, was incurred for a mediation the Court itself had ordered.

Disposition: The Court granted Plaintiff’s Motion for Attorneys’ Fees and Costs and awarded $222,570 in attorneys’ fees, $4,373.40 in non-statutory costs, and the $405 filing fee, for a total of $227,348.40.