As reported by SCOTUSBLOG, the U.S. Supreme Court granted cert yesterday in a case arising out of the 4th Circuit: Hardt v. Reliance Standard Life Insurance Company.

This is a very important case to attorneys handling denial of benefit claims governed by ERISA. At issue is whether a party must “prevail” in court in order to be awarded attorney’s fees under ERISA’s attorney’s fee provision, which is found at 29 U.S.C. 1132(g)(1).

Frequently, courts “remand” cases for further review by the claim’s administrator rather than reversing the denial decision outright. In such a case, the claimant has certainly acheived a significant measure of success although not a victory in the sense of a final judgment in the claimant’s favor. Should the claimant’s attorney be awarded fees in this instance of a remand? Many courts interpreting ERISA’s attorney’s fee provision have said yes, see, e.g., Miller v. United Welfare Fund, 72 F.3d 1066, 1074 (2d Cir. 1995), but others such as the 4th Circuit Court of Appeals in the Hardt case have said no.

Since typical “prevailing party” language found in most federal law attorney’s fee provisions, such as Title VII’s attorney’s fee provision at 42 U.S.C. 2000e-5(k) (click here), is not found in ERISA’s attorney’s fee provision, I believe that the 4th Circuit’s holding, that claimants are not entitled to an award of attorney’s fees where a court remands the claim for further review, will be reversed.

ERISA’s attorney’s fee provision does not contain a “prevailing party requirement”; it simply provides that “the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” Click here.

Thus, I believe that the plain language of ERISA’s attorney’s fee provision will persuade a majority of justices to find that a court does not abuse discretion by awarding attorney’s fees to a claimant who merely achieves a remand rather than a final judgment. Hopefully, this will be the result. Because if the 4th Circuit result is allowed to stand, claims administrators will be perversely incentivized to deny claims and if the claimant acheives a remand, then claims administrator can simply reverse its decision and foreclose any an award of attorney’s fees to the claimant.