Winning Not Necessary for ERISA Attorney’s Fees

(CN) - A worker need not be the "prevailing party" in a dispute over disability benefits in order to collect attorney's fees, the Supreme Court ruled Monday, rejecting a narrow view of the attorney's fee provision of ERISA law.

The justices found that nothing in the Employment Retirement Income Security Act (ERISA) limits attorney's fees to the "prevailing party," as Reliance Standard Life Insurance Co. had argued on appeal.

The high court reversed the 4th Circuit's decision to vacate the nearly $40,000 in attorney's fees awarded to Bridget Hardt, who had convinced a federal judge that Reliance improperly denied her long-term disability benefits.

The district court ruled that Reliance's denial was "not based on substantial evidence" and ordered the insurer to reconsider Hardt's claim. Hardt had undergone surgery on both wrists for carpal tunnel syndrome while working as an executive assistant at Dan River Inc.

After reconsidering, Reliance agreed that Hardt was entitled to benefits, and the district court awarded her attorney's fees. But the 4th Circuit in Richmond, Va., vacated that award on the basis that Hardt was not a "prevailing party," because the remand order never forced Reliance to award her benefits.

Hardt's attorney argued -- and the Supreme Court agreed -- that prevailing party status is not required for attorney's fees under ERISA.

"The words 'prevailing party' do not appear in this provision," Justice Clarence Thomas wrote for the unanimous court. "Nor does anything else in [the law's] text purport to limit the availability of attorney's fees to a 'prevailing party.'"

Instead, the law gives federal courts the discretion to award attorney's fees "to either party," Thomas explained.

"Because Congress failed to include ... an express 'prevailing party' limit on the availability of attorney's fees, the Court of Appeals' decision adding that term of art to a fee-shifting statute from which it is conspicuously absent more closely resembles 'invent[ing] a statute rather than interpret[ing] one,'" Thomas wrote, quoting the Supreme Court's 2005 ruling in Pasquantino v. U.S.

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