Ninth Circuit Affirms Attorneys’ Fee Award to ERISA Welfare Plan in Dispute Brought by Health Care Providers

In Almont Ambulatory Surgery Center, LLC v. International Longshoremen’s and Warehousemen’s Union-Pacific Maritime Association Welfare Plan, No. 20-55464, 2021 WL 5002216 (9th Cir. Oct. 28, 2021), Plaintiffs-Appellants appealed the district court’s order awarding attorneys’ fees under ERISA Section 502(g) to Defendant-Appellee International Longshore and Warehouse Union-Pacific Maritime Association Welfare Plan (“the Plan”).

In a short unpublished memorandum, the Ninth Circuit affirmed the fee award and decided four issues. First, it held that the district court did not err in awarding fees to the Plan based on the Plan’s failure to disclose its insurance policy that provided for the Plan’s cost of defense as part of its Rule 26 disclosure. The Plan did not violate Rule 26 because the insurance policy provides only for the cost of defense, not coverage for any judgment entered in the underlying action.

Second, the court held that the Plan was a proper party to the underlying litigation and could receive attorneys’ fees under ERISA, even if, as Appellants argue, that the Plan’s insurer will receive any funds recovered by the Plan.

Third, the district court did not abuse its discretion in the way that it reduced fees for the Plan’s work at the district court and on the non-ERISA claims. “While the district court arguably could have analyzed the award amount with a greater degree of precision, we do not have a ‘definite conviction that the [district] court made a clear error of judgment’ such that it abused its discretion in awarding $208,395.45 to the Plan, especially considering the overlapping issues in the ERISA and non-ERISA claims.”

Lastly, the court found that although two of the plaintiffs were not initially named in the moving papers seeking fees, they received adequate notice and opportunity to respond before the district court awarded attorneys’ fees against them.