Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lanette Holmstrom v. Metropolitan Life Insurance

May 31, 2011


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Before the Court is Plaintiff Lanette Holmstrom's motion for attorney's fees [99] and her bill of costs [95]. For the reasons explained below, Plaintiff's motion [99] is granted; the Court awards Plaintiff $109,312.75 as her attorney's fees. The Court further awards Plaintiff $1,031 in costs.

I. Background

The facts of this case are detailed in this Court's prior opinion, Holmstrom v. Metropolitan Life Ins. Co., 615 F. Supp. 2d 722 (N.D. Ill. 2009), and in the Seventh Circuit's opinion of the same name, reported at 615 F.3d 758 (2010). Briefly, Plaintiff stopped working in January 2000 when she developed a painful nerve condition which was eventually diagnosed as complex regional pain syndrome. Plaintiff applied to Defendant Metropolitan Life Insurance Company ("MetLife") for disability benefits, and MetLife approved her claim. However, in 2005, MetLife determined that Holmstrom was no longer disabled and terminated her benefits. After MetLife upheld its decision on administrative appeal, Plaintiff filed suit in federal court under the Employee Retirement Income Security Act of 1974 ("ERISA"). See 29 U.S.C. § 1132(a)(1)(B). Plaintiff voluntarily dismissed the action when MetLife offered a second administrative appeal, which yielded the same result. Plaintiff then returned to federal court, filing the instant action to recover benefits. MetLife counterclaimed to obtain a setoff based on disability insurance benefit payments that Plaintiff received from the Social Security Administration.

On March 31, 2009, this Court granted summary judgment for Defendants on Plaintiff's claim for benefits and on MetLife's counterclaim. Plaintiff appealed and on August 4, 2010, the Seventh Circuit reversed this Court's judgment, determining that MetLife's termination of Plaintiff's benefits was arbitrary and capricious. Holmstrom, 615 F. 3d at 761. The Seventh Circuit retroactively reinstated Plaintiff's benefits but left the issue of Plaintiff's attorney's fees, costs, and prejudgment interest to this Court in the first instance. Id. at 779. The parties settled the issue of prejudgment interest [see 91], leaving the issues of attorney's fees and costs unresolved.

II. Attorney's Fees

Section 1132(g)(1) of Title 29 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). In Hardt v. Reliance Standard Life Insurance Co., the Supreme Court recently interpreted ERISA's fee shifting provision, holding that a court may award fees to an ERISA litigant if she has achieved "some degree of success on the merits." 130 S.Ct. 2149, 2157--58 (2010). This ruling supplanted this circuit's "prevailing party" standard for awarding fees in ERISA cases. Id.; see also Young v. Verizon's Bell Atlantic Cash Balance Plan, 2010 WL 4226445 at *4 (N.D. Ill. Oct. 20, 2010); Huss v. IBM Medical and Dental Plan, 2011 WL 1388543, at *12 (7th Cir. April 13, 2011) (unreported) ("[T]he Supreme Court recently clarified that § 1132(g)(1) does not limit attorney's fees awards to a 'prevailing party'; rather, it affords district courts the discretion to award fees to 'either party.'").

There is no doubt that Plaintiff here achieved "some degree of success on the merits" as the Seventh Circuit reversed this Court's judgment, concluded that MetLife's benefits denial was arbitrary and capricious, and retroactively awarded Plaintiff benefits. Hardt, 130 S.Ct. at 2149. Once a party has achieved "some degree of success on the merits," a court must exercise its discretion to determine whether an attorney's fee should be granted. Hardt, 130 S.Ct. at 2158; see also DeBartolo v. Health & Welfare Dept. of the Const. and General Laborers' Dist. Council of Chicago, 2011 WL 1131110, at *1 (N.D. Ill. March 28, 2011); Young, 2010 WL 4226445, at *6.

Prior to Hardt, the Seventh Circuit recognized two tests to guide a court's discretion regarding whether a fee award is appropriate under 29 U.S.C. § 1132(g)(1). Stark v. PPM America, Inc., 354 F.3d 666, 673 (7th Cir. 2004) (citing Quinn v. Blue Cross & Blue Shield Ass'n, 161 F.3d 472, 478 (7th Cir. 1998)). Both tests essentially ask the same question, "was the losing party's position substantially justified and taken in good faith, or was the party simply out to harass the opponent?" Stark, 354 F.3d at 673 (quoting Bowerman v. Mal--Mart Stores, Inc., 226 F.3d 574, 593 (7th Cir. 2000)).

Under the first test "an award of fees to a successful defendant may be denied if the losing party's position was both 'substantially justified'-meaning something more than non-frivolous, but something less than meritorious-and taken in good faith, or if special circumstances make an award unjust." Herman v. Central States, S.E. and S. W. Areas Pension Fund, 423 F.3d 684, 696 (7th Cir. 2005); see also Stark v. PPM America, Inc., 354 F.3d 666, 673 (7th Cir. 2004). A position is not substantially justified if it is without a "solid basis." Prod. & Maint. Employees' Local 504 v. Roadmaster Corp., 954 F.2d 1397, 1405 (7th Cir. 1992).

Under the second test, the Court looks to the following five factors to determine whether a fee award is appropriate: 1) the degree of the offending parties' culpability or bad faith; 2) the degree of the ability of the offending parties to satisfy personally an award of attorney's fees; 3) whether or not an award of attorney's fees against the offending parties would deter other persons acting under similar circumstances; 4) the amount of benefit conferred on members of the pension plan as a whole; and 5) the relative merits of the parties' positions. Quinn, 161 F.3d at 478. When employing the five-factor test, not all factors need be present to conclude that an award of fees is appropriate; rather, "the five factor test involves a weighing of the relevant factors as they apply to the facts of a particular case." Lockrey v. Leavitt Tube Employees' Profit Sharing Plan, 1991 WL 255466, at *2 (N.D. Ill. Nov. 22, 1991). The five-factor test is used to "structure or implement, rather than to contradict" the substantially justified test. Lowe v. McGraw--Hill Cos., 361 F.3d 335, 339 (7th Cir. 2004).

Both the Seventh Circuit and the Supreme Court have questioned the five-factor test's continued vitality. See Sullivan v. William A. Randolph, Inc., 504 F.3d 665, 672 (7th Cir. 2007) (noting that the five-factor test "adds little * * * to the simpler test, and perhaps has outlived its usefulness"); Hardt, 130 S.Ct. at 2158 (observing that because the five-factor tests used by a number of circuits "bear no obvious relation to § 1132(g)(1)'s text or to our feeshifting jurisprudence, they are not required for channeling a court's discretion when awarding fees under this section"). And following Hardt,courts in this district have questioned the ongoing utility of either test.*fn1

Most recently, in Huss v. IBM Medical and Dental Plan, 2011 WL 1388543, at *12 (7th Cir. April 13, 2011), a recent unreported case, the Seventh Circuit opined that "[e]ven after an eligibility determination under Hardt, [courts] still must consider whether an award of attorney's fees is appropriate." The Seventh Circuit concluded that even after Hardt, application of its "traditional" twin tests was still relevant to "inform the court's analysis" regarding whether an award of fees is appropriate. Id. And, although the district courts discussed in footnote one acknowledged that the continued application of the twin tests is an open question, those courts applied the tests anyway. See Raybourne, 2011 WL 528864, at *2; Young, 2010 WL 4226445, at *9; DeBartolo, 2011 WL 1131110, at *2. This Court will do the same.

Here, it is without question that Plaintiff is entitled to her attorney's fees regardless of which tests are applied. The first factor, the degree of culpability or bad faith of the offending party bears little on the issue, although the Seventh Circuit did find that MetLife was acting under a conflict of interest that affected its decision. Holmstrom, 615 F.3d at 777-78. The second factor, the ability to pay, weighs in favor of an award. Defendants obviously have the ability to satisfy any award ordered. The third factor, whether an award might deter others acting under similar circumstances also favors Plaintiff. For instance, other plan administrators are more likely to be conscious of structural conflicts if they face fee awards in addition to being required to pay benefits. The fourth factor, benefit to other members of the pension plan, is largely irrelevant in an individual dispute such as the instant case, although MetLife may be more likely to take into account the Social Security Administration's decisions to award benefits after the instant case. Finally, the fifth factor (relative merit) is, as Sullivan noted, 504 F.3d at 672, "an oblique way of asking whether the losing party was substantially justified in contesting his opponent's claim or defense." To this point, the Seventh Circuit specifically concluded that MetLife's ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.