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The Basics of an ERISA Life, Health and Disability Insurance Claim – Part One: ERISA Background, Purpose and Timing Requirements

In this several part Blog Series entitled The Basics of an ERISA Life, Health and Disability Insurance Claim, we will discuss the basics of an ERISA life, health and disability claim, from navigating a claim, handling a claim denial and through preparing a case for litigation. In Part One of this Series, we discuss the background and purpose of ERISA, along with procedural rules and practical considerations for a disability claim.

Congress enacted the Employee Retirement Income Security Act of 1974 (“ERISA”) (29 U.S.C. § 1132(e)(2)) in response to public dissatisfaction with poorly funded pension plans, onerous vesting requirements and labor leader misuse of union benefit funds. Senator Jacob Javits, a sponsor of ERISA, observed at the time that only a relative handful of the estimated tens of millions of American workers covered under private pension plans would ever receive any money from the plans on which they staked their financial futures. Fearing that states would enact a patchwork of inconsistent pension reform legislation, employers began supporting federal regulation of private benefit plans, provided it had a strong preemption provision. Thus, ERISA was enacted and sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

In general, ERISA governs “employee benefit plans” but does not cover group health plans established or maintained by governmental entities, churches for their employees or plans which are maintained solely to comply with applicable workers compensation, unemployment or disability laws.

ERISA’s Subchapter 1—entitled “Protection of Employee Benefit Rights” sets forth the Congressional findings and contains a declaration of policy. In enacting ERISA, Congress found that the “continued well-being and security of millions of employees and their dependents are directly affected by [employee benefit plans].” 29 U.S.C. § 1001(a). Congress further declared that a policy of ERISA was “to protect . . . the interests of participants in employee benefit plans and their beneficiaries . . . by providing for appropriate remedies, sanctions, and ready access to the Federal Courts” and to “increase the likelihood that participants and beneficiaries . . . receive their full benefits.” Id. at § 1001(b), 1001b(c)(3). This section allows plan participants or beneficiaries whose benefit claims were denied to file an action to recover benefits in federal or state court.

While ERISA itself does not require a participant or beneficiary to exhaust administrative remedies in order to bring an action under Section 502 of ERISA, 29 U.S.C. Section 1132, courts adopted an exhaustion requirement that requires an ERISA claimant to exhaust available administrative remedies before bringing a claim in federal court. However, when an employee benefits plan fails to establish or follow reasonable claims procedures consistent with the requirements of ERISA, a claimant may not be required to exhaust administrative remedies because her claims may be deemed exhausted.

The Supreme Court has noted that there is a two-tiered remedial scheme under ERISA—the first tier is the internal review process required for all ERISA disability benefit plans. After the participant files a claim for disability benefits, the plan has 45 days to make an “adverse benefit determination.” Two 30-day extensions are available for “matters beyond the control of the plan” giving the plan a total of 105 days to make that determination. 29 C.F.R. § 2560.503-1(f)(3).

Following denial, the plan must provide the participant with “at least 180 days . . . within which to appeal the determination.” The plan has 45 days to resolve that appeal, with one 45-day extension available for “special circumstances (such as the need to hold a hearing.)” In the ordinary course, the regulations contemplate an internal review process lasting about one year at the very latest, assuming the claimant waits until the 180-day time period expires. Upon exhaustion of the internal review process, the participant is entitled to proceed immediately to judicial review, the second tier of ERISA’s remedial scheme.

Notably, the 180-day limit to appeal the determination is treated much like a statute of limitations. If missed, the claimant may be denied the right to have her claim reconsidered, and also be denied the right to file suit in court. Thus, it is critical that appeals of claim denials are made timely.

Further, federal courts have established rules limiting judicial review to the contents of the “administrative record.” While there are some exceptions, generally it is important to supplement the record with as much evidence as possible during the appeal stage to support a claimant’s position. Therefore, not timely filing an appeal or appealing but not including important documents and evidence to support an ERISA claim can have extreme negative consequences to an ERISA plan participant or beneficiary. Highly experienced law firms like McKennon Law Group PC are often hired to navigate the ERISA claims and appeal process given the complexity of ERISA and its dangerous pitfalls.

The McKennon Law Group PC periodically publishes articles on its Insurance Litigation and Disability Insurance News blogs that deal with frequently asked questions in insurance bad faith, life insurance, long-term disability insurance, annuities, accidental death insurance, ERISA and other areas of law. To speak with a highly skilled California/Nationwide disability insurance lawyer or ERISA lawyer at the McKennon Law Group PC, call (714)274-6322 for a free consultation or go to our website at www.mckennonlawgroup.com and complete our free consultation form today.

A “Three-Year” Limitations Period in a Disability Policy Can Extend California’s Two-Year Statutory Limitations Period for Insurance Bad Faith

Life, health and disability insurers are always looking for ways to deny insurance claims. When they do so unreasonably, insured policyholders may be able to sue them for insurance bad faith under California law. Count on insurers to argue everything they can to defeat a bad-faith claim, including asserting the statute of limitations for bad-faith claims. Life, health and disability insurance plaintiff attorneys must remain current as to changes in the law so they can defeat these insurance company tactics. One notable question they must answer is this: Can a disability policy provision setting forth the timing of a lawsuit against the insurer “extend” California state tort law (e.g., statute of limitations to three years) from the statutory two-year limitations period? Recently, a United States District Court in San Francisco held that it could. That court denied an insurance company’s motion to dismiss, because the policy’s contractual language (that barred an action “more than three years after the time proof of claim is required”) could be one that a “reasonable layperson” interprets as meaning she had three years (rather than the statutory two-year period) to bring any action, including both contractual and tort claims, based upon an allegedly wrongful cancelation of the policy. Alberts v. Liberty Life Assurance Company of Boston, 65 F.Supp.3d 790, 795 (2014). Therefore, it is crucial to closely compare any policy language that varies from the statute of limitations, in order to successfully argue for a longer timeframe within which to bring such a California state action.

Plaintiff, Karen Alberts, was a police officer for the University of California when she suffered an injury to her right wrist during physical-training exercises in September 2009. After her injury, Alberts resumed work in a modified-duty capacity, but her condition worsened and, eventually, the UC police department could no longer accommodate her medically prescribed work restrictions. On March 19, 2010, Alberts stopped working for the police department. She was initially approved by Liberty Life Assurance Company of Boston (“Liberty”) for short-term-disability (“STD”) benefits from February 1 through July 31, 2011; she was subsequently extended coverage through February 28, 2012. Sometime between February 9 and February 22, 2012, Alberts received a letter from Liberty that stated that Liberty would be terminating her STD payments because it had determined that she did not qualify for continued benefits under the policy’s provision for long-term coverage.

Under the standard two-year statute of limitations period set forth in California Code of Civil Procedure Section 339(1) for tortious breach of the covenant of good faith and fair dealing (also known as a bad-faith claim), Liberty argued that Alberts’ claim was filed too late, by at least three days, on February 25, 2014. The District Court compared the policy language barring such an action (“more than three years after the time proof of claim is required”) to California Insurance Code Section 10350.11, which sets forth that disability policies must include the following (at a minimum): “No action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished.” That exact language in the Insurance Code has repeatedly been held to not displace the two-year statute of limitations for purposes of federal ERISA claims. Nonetheless, since this was a state claim (even though it was being tried in federal court) and did not use exactly the same language as Insurance Code Section 10350.11, the trier of fact could find that a “reasonable layperson” would assume that she had three years, rather than two, within which to file her lawsuit.

In the meantime, however, in non-ERISA state-law disability insurance claims (even in federal court), it is imperative that the contractual language in each disability policy be closely examined. Where the statutory two-year limitation period is an issue, does the policy language vary at all from California Insurance Code Section 10350.11: “No action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished”? If it does, even by a few words, the plaintiff may be able to argue that a longer, three-year limitations period applies, for both contractual and tort claims.

Robert J. McKennon Recognized as 2019 “America’s Top 100 Bet-the-Company Litigators for Southern California”

McKennon Law Group PC is proud to announce that its founding shareholder Robert J. McKennon has been recognized as one of Southern California’s “America’s Top 100 Bet-the-Company Litigators.” With this honor, limited to only 100 attorneys in Southern California, Mr. McKennon joins the ranks of California’s most esteemed Bet-the-Company Litigators, including: Joseph Cotchett, Skip Keesal, Thomas Girardi, Patricia Glaser, and Thomas Bienert. Additional recipients can be seen on the website devoted specifically to recognizing the best High-Stakes Business Litigators throughout the country at www.Top100BetTheCompanyLitigators.com. Fewer than one-half percent (0.5%) of attorneys in the United States receive this award, making it the premier achievement for High-Stakes Business/Insurance Litigators throughout the nation.

To be eligible for consideration as a “Bet-the-Company Litigator” for this award, an attorney must have litigated (for either plaintiff or defendant) a matter with the fate of a business worth at least $2,000,000 at stake. Thereafter, qualifying candidates are further evaluated and ranked based upon our proprietary algorithms and Advanced Data Analytics, which assess a broad array of criteria for each candidate, including (but not limited to) the attorney’s significant Bet-the-Company settlements and/or verdicts, other exceptional business/insurance litigation settlements and/or verdicts, professional experience, peer reputation ratings, client satisfaction ratings, other notable honors, media notoriety, and community impact, among many other proprietary factors.

Cassim v. Allstate Insurance: Attorney’s Fees in Contingency-Fee “Bad Faith” Cases

Since 2004, when the California Supreme Court ruled that a “portion” of contingency attorney’s fees are recoverable in bad-faith insurance cases, plaintiffs and their lawyers have been able to recover attorney’s fees based in part on the specific terms of the contingency-fee retainer agreement. For starters, in order to recover attorney’s fees in these actions, a policyholder must prove that (1) contractual benefits were withheld in bad faith, and (2) reasonable fees were incurred by the policyholder to recover those benefits. However, any attorney’s fees incurred merely to prove the alleged “bad faith” claims are not recoverable at all; only fees incurred to prove actual coverage are recoverable. Cassim v. Allstate Insurance, 33 Cal.4th 780, 811 (2004).

In Cassim, plaintiffs Fareed and Rashida Cassim purchased a home in Palmdale in 1989 and insured the property against loss with Allstate Insurance. In December 1990, a fire (later determined to be arson) caused damage to the home. Although the fire burned only in the master bedroom and kitchen, the extensive heat, smoke and water damage to the rest of the structure rendered the entire home uninhabitable. After plaintiffs proved “bad faith” on the part of Allstate Insurance, a jury awarded plaintiffs a combined $3,594,600 in compensatory damages and $5 million in punitive damages. The plaintiffs’ attorney had a 40%-contingency-fee agreement.

The Cassim court held that a proper calculation of attorney’s fees requires the trier of fact to determine the percentage of fees attributable to securing just the contract recovery. This formula is based on the percentage of the attorney’s overall efforts devoted to the contractual recovery portion of the case and is divided into three categories: contract claim only, bad-faith claim only, and both claims. The Supreme Court remanded the case to the trial judge to make the calculation.

Using hypothetical numbers, and assuming a total compensatory award of $1 million, the 40% contingency fee would be $400,000. If the policyholder’s lawyer spent 1,500 total hours on the case and can prove the breakdown as follows: 200 hours on the contract claim only, 800 hours on the bad-faith claim only and 500 hours on both claims, then the trier of fact could, reasonably, conclude that one-half of the hours spent on the joint “contract and bad faith” issues are fairly attributable to the contract; i.e., half of 500 hours, or 250 hours, plus the 200 hours from the contract claim only, would total 30%. That 30% of the total attorney’s fee ($400,000) would be recoverable as well: $120,000 extra paid to the plaintiffs.

However, the Cassim court also cautioned judges to disregard fee agreements designed solely to manipulate the calculation of recoverable costs to the policyholder’s benefit, as have been shown to exist in some cases in the intervening years. For instance, the case of Pulte Home Corporation v. American Safety Indemnity, 14 Cal.App.5th 1086 (2017) disallowed a last-minute modification of a fee agreement from contingency to hourly, as an improper attempt to inflate the attorney’s fee (and punitive damage) award. This case involved the development of two residential housing projects that were built beginning in 2003 and sold between 2005-2006. The various subcontractors were required to name the developer as an “additional insured” on their policies, some of which were issued by American Safety. In 2013, several homeowners sued Pulte for alleged defects in the work performed by the subcontractors who were insured by American Safety. American Safety denied coverage and refused to provide a defense to Pulte because the construction had taken place 10 years prior.

Pulte sued American Safety, and prevailed on the “bad faith” claims, but American Safety then appealed the trial court’s award of attorney’s fees and punitive damages as violating the dictates set forth in the Cassim case, specifically improperly attempting to inflate the attorney’s fee (and punitive damage) award. Pulte’s lawyer in the bad-faith case originally had entered into a contingency-fee agreement with Pulte, which would have resulted in a fee award of only $371,000 under the Cassim formula, set forth above.

After the trial on bad faith, but before the punitive damage phase, Pulte “modified” the fee agreement to be based on an hourly rate instead and, thereafter, claimed an additional $274,000 in attorney’s fees actually incurred and paid, for a total of $645,000. The trial court disagreed with American Safety’s assertion that the change in the fee agreement was to manipulate the process. After making deductions for fees unrelated to pursuing amounts due under the insurance contract, the trial court awarded Pulte $471,313.52 in attorney’s fees. Based on the one-to-one ratio with attorney’s fees, the trial court also awarded $500,000 in punitive damages.

The Court of Appeal reversed, stating, “We have serious concerns that this change in Pulte’s fee agreement was apparently ‘designed to manipulate the calculation of Brandt fees’ to the plaintiff’s benefit.” Id. at 1132. The court also rejected Pulte’s argument that, because Pulte had actually incurred and paid the hourly fee, that amount must be considered as the proper amount for the attorney-fee award. The court concluded that the judge should have based the attorney-fee award on the agreement in force during the trial and, therefore, remanded the case to recalculate the proper amount of attorney’s fees (and to adjust the punitive damage award, since because it was based on the improper attorney-fee award). Id. at 1133.

The good news for plaintiffs’ attorneys is that any “bad faith” case can be prosecuted under a contingency-fee agreement, based on the Cassim case, and an award of attorney’s fees based on that fee agreement may be possible. California courts continue to define the outlying boundaries for recovering contingency attorney’s fees, but at least there is no question that “reasonable” fees (attributable to proving actual coverage) are recoverable.

McBean v. United of Omaha Life: Judge Anello Finds Employer Liable for Breach of Fiduciary Duty, Orders Payment of Life Insurance Policies’ Face Value under Equitable Surcharge Theory

McBean v. United of Omaha Life: Judge Anello Finds Employer Liable for Breach of Fiduciary Duty, Orders Payment of Life Insurance Policies’ Face Value under Equitable Surcharge Theory

Application of the doctrine of “equitable surcharge” in ERISA has become a very significant theory of recovery for ERISA plan participants in obtaining their life insurance and medical insurance benefits. In a recent decision by the U.S. District Court for the Southern District of California, McBean v. United of Omaha Life Insurance Company, 2019 WL 1508456, the ERISA surcharge theory was used to overturn the denial of a life insurance claim, thus salvaging substantial life insurance benefits that would otherwise have been lost through breach of fiduciary duty and misrepresentation.

In McBean, the Plaintiff won a significant victory in a case involving a claim for life insurance benefits under an ERISA-governed plan. The Plaintiff’s mother (“Decedent”) was covered by United of Omaha’s (“United”) Basic Life Insurance Policy and Voluntary Life Insurance Policy (“Policies”). United was the Claims Administrator, and the Plan Administrator/fiduciary was the employer By Referral Only, Inc. (“Referral”). The benefits at issue under the Policies were $43,550.00 and $100,000.00. At the age of 67, the Decedent was diagnosed with breast cancer, and left work on June 9, 2015 to have surgery. She returned to work part-time thereafter, but by August 10, 2016, she had to stop working, and died on August 5, 2017. United accepted the premium payments for the Policies made by Referral up to the date of the Decedent’s death.

According to the Policies, coverage ends “the last day of the month in which … [y]ou are no longer Actively Employed….” To be “Actively Employed” according to the Policies means to work 40 hours or more per week regularly, and to receive “compensation from the Policyholder for work performed for the Policyholder.” Among other provisions involving eligibility and enrollment updates, the Policies required Referral to inform United when an employee’s eligibility status changes, and they contained a conversion provision that allowed the covered employee to apply for an individual policy without providing health information. On February 6, 2017, the Decedent was granted long-term-disability benefits retroactive to September 6, 2015. On August 21, 2017, the Plaintiff (as trustee of his mother’s trust) submitted a claim to United for benefits under the Policies. United denied the claim, responding that the Policies were “not in force at the time of [Decedent’s] death on August 5, 2017” because she was no longer working. The Plaintiff appealed, explaining that Referral’s managing director told the Decedent and her family that the company would ensure payment of the premiums. On December 12, 2017, United affirmed its earlier claim decision that the Decedent was no longer covered when she died, and then it refunded the premiums Referral had paid for the Decedent during her period of ineligibility.

The Plaintiff filed an ERISA lawsuit setting forth a claim for breach of fiduciary duty against United and Referral. The Plaintiff’s first argued that United had waived the “active employment” eligibility requirements (which, on their own, would mean that the Decedent’s coverage had ended in June 2015 for the Voluntary Life Policy and June 2016 for the Basic Life Policy) because it continued to accept premiums even though it knew that the Decedent was not actively employed. The Plaintiff also claimed that United had waived the “written notice” requirements for extension of coverage. However, the court found that such an argument would create coverage where it did not exist in the Policies, and found as well that the Plaintiff had not shown sufficient evidence of “an intentional and voluntary relinquishment of United’s right to require a written request for continued coverage . . . .”

With regard to the Plaintiff’s claim for equitable surcharge under 29 U.S.C. Section 1132(a)(3) against United for breach of fiduciary duty—a remedy that would provide “compensatory damages for actual harm caused by . . . breach of duty”—Plaintiff argued that United had a duty to develop a system to confirm eligibility before it accepted premiums, rather than waiting until a mistake occurred to implement a system. Citing Fink v. Union Cent. Life Ins. Co., 94 F.3d 489, 492 (8th Cir. 1996), the court rejected that argument, finding that “United had no duty to train or supervise Referral because United did not have the authority to select or remove the plan administrator.” In addition, Referral was responsible for determining eligibility and updating United on which employees should be covered under the Policies.

Referral was also found to be a fiduciary under the policy because it is the plan sponsor and plan administrator, and breach of duty, the court ruled, was indicated by Referral’s misrepresentation to the Decedent that she would continue to have life insurance coverage. That promise was false and material and led to “detrimental reliance by the plaintiff.” In re Computer Scis. Corp. ERISA Litig., 635 F.Supp.2d 1128, 1140 (C.D. Cal. 2009). The standard for material misrepresentation involves “a substantial likelihood that it [the misrepresentation] would materially mislead a reasonable employee in making an adequately informed . . . decision.” (Id. At 1141.) With respect to detrimental reliance, that standard was met because the Decedent, trusting in what Referral told her, “lost the opportunity to convert or port her coverage, or obtain coverage she wanted through another channel, such as on the individual market for life insurance.”

It is noteworthy that the court rejected Plaintiff’s claim of derivative liability on the part of United based on Referral being its agent, and granted summary judgment in favor of the Plaintiff onhis claim against Referral in the amount of the Policies’ combined face value, $143,550.00; it also allowed Plaintiff to file a motion for reasonable attorneys’ fees and costs. It appears that Plaintiff’s counsel did not cite important and relevant Ninth Circuit authority that clearly would have made the insurer liable for the acts of the employer (this is why it’s important to hire the best ERISA lawyers in California, the McKennon Law Group PC). Even though the court awarded summary judgment against the employer on all claims but one, that one claim for the value of the life insurance policies under the doctrine of equitable surcharge proved invaluable for the family of the deceased employee.

In Harlow v. MetLife, Judge Bernal Brings Clarity to Disputes Involving “Reasonable” Attorneys’ Fees Adopting Standards Favorable to ERISA Claimants

The topic of attorneys’ fees has long been of interest to insurance lawyers and clients alike. Recently, the courts have grappled with issues such as: When are attorneys’ fees recoverable? What types of billing practices are reasonable? What are reasonable hourly rates? Attorneys want the assurance that the fees they charge will be deemed “reasonable,” and defendants (the insurance companies) want to know when they can raise defenses to the amount of an attorneys’ fees they may be expected to pay. In this article, we will consider a recent case that has helped bring some clarity to the issue of “reasonable” fees for legal work. Robert J. McKennon of McKennon Law Group PC acted as an expert in this case as to reasonable hourly rates. The court adopted his testimony in full.

In a recent decision by the U.S. District Court for the Central District of California, Harlow v. Metropolitan Life Insurance Company, 2019 WL 2265136, the Plaintiff successfully challenged the insurer’s decision to terminate her long-term disability payments. She then moved for attorney’s fees, with each side submitting multiple declarations and exhibits for or against specific amounts and practices. There was no question about the court’s discretionary authority to award reasonable attorneys’ fees in an ERISA case, and case law holds that a court must initially determine whether the plaintiff has “achieved some degree of success on the merits.” Simonia v. Glendale Nissan/Infinity Disability Plan, 608 F.3d 1118, 1119 (9th Cir. 2010). That success must go beyond a victory on mere procedural issues or some “trivial” matter. Beyond this test, a court must consider the five factors derived from Hummell v. S. E. Rykoff & Co., 634 F.2d 446, 452 (9th Cir. 1980). These “Hummell factors” are as follows:

(1) the degree of the opposing parties’ culpability or bad faith;

(2) the ability of the opposing parties to satisfy an award of fees;

(3) whether an award of fees against the opposing parties would deter others from acting under similar circumstances;

(4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and

(5) the relative merits of the parties’ positions.

The Harlow court ruled that the Plaintiff was entitled to reasonable attorney’s fees, pointing out that MetLife itself made no argument denying the Plaintiff had “achieved success on the merits of her action,” nor cited any “special circumstances” that might have precluded the fee demand. Moreover, the Hummell factors only apply when the merits of the Plaintiff’s claim are still under serious consideration.

The court next addressed what makes an attorney’s fee “reasonable.” A reasonable fee is determined by means of “a hybrid lodestar/multiplier approach.” McElwaine v. US West, Inc., 176 F.3d 1167, 1173 (9th Cir. 1999) (citations omitted). A lodestar amount is determined by “multiplying the number of hours reasonably expended by each attorney’s reasonable hourly rate.” Id. This determination notwithstanding, a court would be within its rights to disallow “excessive, redundant, or otherwise unnecessary” claims. Id. When—as in Harlow—a Plaintiff seeks an award of $184,750 for attorneys’ fees, the issue of “reasonableness” deserves scrutiny. The court first cited case law in favor of looking to “the prevailing market rate for similar services ‘by lawyers of reasonable comparable skill, experience, and reputation.’” Mardirossian v. Guardian Life Ins. Co. of Am., 457 F.Supp.2d 1038 (C.D. Cal. 2006), citing Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). The Plaintiff’s counsel charged $400 per hour, a figure she reached upon making partner, while her fellow counsel billed at $700 per hour. The court found these sums reasonable due to the respective attorneys’ long experience with ERISA claims. In support of the Plaintiff’s counsel on this matter of relevant experience, Robert J. McKennon, managing shareholder of The McKennon Law Group PC, submitted evidence via testimony based on his more than thirty years in insurance law and ERISA law, especially in the areas of life, disability and health.

In opposition to MetLife’s assertion that the fees quoted run contrary to “policy considerations” and ERISA’s purpose “to provide inexpensive, expeditious resolution to disputes concerning qualifying employee benefit plans” (citations omitted), the court pointed to the Ninth Circuit’s determination that courts should not arrive at an appropriate rate “by reference to the rates actually charged the prevailing party” but instead “by reference to the fees that private attorneys of an ability and reputation comparable to that of prevailing counsel charge their paying clients for legal work of similar complexity.” Welch v. Metro. Life Ins. Co., 480 F.3d 942, 947 (9th Cir. 2007). With regard to the claim made by MetLife about ERISA’s public policy imperative, the court again cited the Ninth Circuit, which determined that among ERISA’s goals were “protect[ing] employee rights” and “secur[ing] access to federal courts.” Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589 (9th Cir. 1984). The court found that allowing “reasonable” attorneys’ fees would in fact help clients gain such access. If attorneys cannot charge the prevailing rate, they might be unwilling to take on ERISA clients, which would effectively deprive such clients of access to the courts.

MetLife also made a number of unavailing arguments against the sums charged by the Plaintiff’s counsel. MetLife argued that the hours billed were excessive, duplicative, overly reliant on prefabricated “boilerplate” language, prone to non-itemized block-billing, and inclusive of inappropriate administrative or merely clerical labor. The court’s responses to these concerns testified to the complexity and dynamic quality of the labor involved in lawyering, and affirmed the awarding of reasonable attorneys’ fees to be in line with ERISA’s overarching purpose: providing plaintiffs with access to the federal court system in their attempts to recover benefits to which they believe they are entitled. With respect to supposedly “duplicative” hours billed, the court cited case law: “a lot of legal work product will grow stale; a competent lawyer won’t rely on last year’s, or even last month’s, research.” Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008). Essentially, the court inferred that since the law itself changes, so must an attorney’s research undergo diligent updating. As for the tendency of several lawyers to work on the same set of tasks, while the court acknowledged it as a genuine concern, it found that where there is appropriate division of labor among the attorneys—in their example from the present case, one attorney drafts a document while others review it carefully—there is little need to worry about the reasonableness of work thus accomplished. The court deducted only $2,100 from the total of the Plaintiff’s counsel’s fees, stemming from a charge of 7.8 hours for half a day’s mediation work. With regard to the issue of “boilerplate” language in legal pleadings and other documents, the court accepted the view of the Plaintiff’s counsel that not using such language would only have occupied more of their time: “the time spent preparing this Motion would have been substantially greater had they not efficiently re-used past efforts.” Finally, the court did not find that the Plaintiff’s counsel’s block-billing reached the point where a reviewer could not tell “how much time was spent on particular activities,” and neither did it accept MetLife’s argument that preparing subpoenas using partially recycled language, or preparing exhibits, was too “clerical” to call for an attorney’s full hourly fee.

In summary, the court’s decision prevents defendant insurers from too easily challenging the fees claimed by counsel in their efforts to help ERISA clients recover duly owed long-term disability benefits.

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