District Court Awards Attorney’s Fees to ERISA Plaintiff, Highlighting Insurer’s Procedural Errors in Benefit Denial as Factor in Award

In Mullins v. The Consol Energy, Inc. Long Term Disability Plan, No. 2:20-CV-1883, 2025 WL 712931 (W.D. Pa. Mar. 5, 2025), Pennsylvania Western District Judge J. Nicholas Ranjan granted Plaintiff’s Motion for Attorney’s Fees in his action for recovery of long-term disability benefits pursuant to the Employee Retirement Income Security Act of 1974 (ERISA). The court awarded most of the attorney’s fees sought, which totaled more than $240,000.

This matter was returned to the district court after Plaintiff appealed to the Third Circuit, challenging the district court’s entry of summary judgment for Consol. The Third Circuit vacated the district court’s entry of summary judgment and remanded the case for entry of summary judgment in favor of Plaintiff. On remand, the appellate court also instructed the district court to evaluate Plaintiff’s contention regarding the erroneous Social Security offset applied to his benefits. The parties resolved the Social Security offset dispute non-judicially, allowing Plaintiff to proceed with a motion for attorney’s fees.

Guiding the award of attorneys’ fees pursuant to ERISA, 29 U.S.C. § 1132(g)(1), the district court examined the factors outlined in Ursic v. Bethlehem Mines, 719 F. 2d 670, 673 (3rd Cir. 1983):

1. Culpability: The court found Consol’s denial of benefits to be arbitrary and capricious, thus constituting culpable conduct. The Third Circuit had noted that the denial was based on flawed procedural grounds, such as failing to inform Plaintiff adequately about the reliance on the 2016 Transferable Skills Analysis document and ignoring opportunities to rectify these errors during the administrative appeal.
2. Ability to Pay: Consol did not dispute its ability to satisfy an award of attorney’s fees, which weighed in Plaintiff’s favor.
3. Deterrent Effect: The court determined that an award of fees could deter similar conduct by Consol and other plan administrators, reinforcing the importance of clear and accurate communication regarding claim denials.
4. Benefit to Plan Members: Although this factor was deemed largely duplicative of the deterrent effect, it was considered neutral, as the ruling indirectly benefits plan members by discouraging administrative missteps.
5. Merits: The Third Circuit’s reversal of the district court’s initial ruling underscored Plaintiff’s stronger position on the merits, bolstered by the appellate court’s pointed critique of Consol’s procedural errors.

Considering all the factors, the court awarded reasonable attorney’s fees, subject to specific reductions. In calculating reasonable fees, the court applied the lodestar method, multiplying the hours reasonably expended by a reasonable hourly rate. Notably, the court allowed for some reduction in the fee request due to excessive hours billed for certain tasks, duplication of efforts between Plaintiff’s attorneys, and non-compensable administrative tasks. Specific reductions included 5.4 hours related to post-filing summary judgment tasks, 1 hour for routine filings, 4.6 hours for administrative tasks, and 4.4 hours for legal research. Additionally, the court found that fees associated with mediation costs were not recoverable due to prior agreements.

The original fee request was for $243,568.50, plus $9,590.34 in costs. The court awarded Plaintiff $241,746 in attorneys’ fees and $8,277.84 in costs, reflecting the outlined reductions and acknowledging the complexities and procedural history of the case. The fee-shifting permitted by ERISA is one of the few “sticks” available for claimants in their disputes with plan administrators over denied benefits.

If your insurer has denied or otherwise limited your disability insurance claim, contact us for assistance.