In Woolsey v. Aetna Life Insurance Company, et al., No. 20-16885, 2022 WL 1598964 (9th Cir. May 20, 2022), the Ninth Circuit reversed and remanded the district court’s denial of attorneys’ fees to Plaintiff-Appellant Michael Woolsey after the district court determined that Defendant Aetna Life Insurance Company committed several procedural errors in its review of Woolsey’s long-term disability claim and ordered a remand. ERISA § 502(g) provides that “the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). Under Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), a claimant must show “some success on the merits” to be eligible for fees; a “trivial success” or “purely procedural” victory is not enough.
In granting Woolsey’s motion for summary judgment, the district court concluded that Aetna made the following errors which prevented the full development of the record and denied Woolsey a full and fair review: “(1) failed to assess the aggregate effect of Woolsey’s medical conditions; (2) gave dismissive treatment to reports from his treating specialists; (3) failed to address specific vocational requirements as required by the plan; (4) failed to inform Woolsey of a deficiency in the record and to consider those missing records; (5) failed to disclose independent reviewers’ reports; (6) failed to adequately explain what was necessary to correct the record; and (7) failed to adequately investigate his physicians’ reports.” The district court remanded Woolsey’s claim to Aetna to correct its errors and allow Woolsey to supplement the record. The court also ordered Aetna to consider Woolsey’s SSDI award which came after Aetna’s initial review. Woolsey moved for attorneys’ fees after winning the remand, but the district court denied the motion because Woolsey did not prevail on his central claims.
The Ninth Circuit found that the district court erred in its application of the Hardt standard. Woolsey was not required to prevail on his central claims. The court found that the remand order was more than a purely procedural victory, even though the district court did not signal that Woolsey should be eligible for benefits. Like in Hardt, “the court determined the administrative process was significantly deficient, and that the plaintiff obtained a renewed opportunity to secure benefits.” Because the record was not fully developed, the district court was in no position to assess the merits of the claim. Lastly, the court found it of “no consequence” that Woolsey’s complaint did not expressly seek a remand because he alleged the relevant ERISA violations in his complaint and sought a remand in the alternative in his summary judgment motion. In ruling for Woolsey, the Ninth Circuit made clear that it did not hold that any “remand order, without more” is sufficient for an attorneys’ fees award under ERISA.
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