Micha v. Sun Life Assurance of Canada, Inc.
874 F.3d 1052
| 9th Cir. | 2017Background
- Group Disability Benefits Plan (Group Disability) sought appellate attorney’s fees under 29 U.S.C. § 1132(g)(1) after this Court affirmed a district-court award of litigation fees in Micha v. Group Disability Benefits Plan.
- Underlying facts: Sun Life denied Dr. John Micha’s disability claim; the district court found misconduct by Sun Life, Sun Life settled and granted benefits, and the court awarded litigation fees to Group Disability.
- Group Disability moved to transfer consideration of appellate fees to the district court under Ninth Cir. Rule 39-1.8; the district court denied appellate fees after applying the five-factor Hummell test but considered only Sun Life’s conduct on appeal, not its pre-appeal conduct.
- On appeal, Group Disability argued the district court erred by ignoring Sun Life’s pre-appeal bad faith and by misapplying the Hummell factors; it also asserted (but did not preserve below) that an "automatic-entitlement" rule should apply to fees-on-fees.
- The Ninth Circuit majority held that district courts must consider the entire course of litigation (including pre-appeal conduct) when applying Hummell to requests for appellate fees, reversed the district court’s denial, and remanded for calculation of a reasonable award.
- Judge Berzon concurred, adding that she would adopt an automatic entitlement (fees-on-fees) rule for successful defense of an ERISA fee award, but she did not join that holding because it was not raised below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hummell analysis for appellate fees must consider entire litigation, including pre-appeal conduct | Group Disability: district court must consider pre-appeal bad faith and the whole case when applying Hummell | Sun Life: Hummell should focus on appellate conduct; pre-appeal conduct not required to be considered for appellate-fee requests | Held: Court must consider entire course of litigation (including pre-appeal conduct) when applying Hummell; reversal and remand for fee calculation |
| Whether an automatic-entitlement (fees-on-fees) rule applies to ERISA § 1132(g)(1) appeals | Group Disability (argued on appeal): successful defense of a fee award should generally entitle appellee to appellate fees | Sun Life: Hummell governs and no automatic rule; focus on appellate conduct | Held: Issue forfeited (not raised below); majority declined to adopt automatic rule; Berzon concurrence would adopt it but did not join that holding |
| Whether prevailing-party presumption applies on appellate fees | Group Disability: prevailing-party presumption under United Steelworkers supports fee award | Sun Life: disputed applicability; district court did not apply presumption | Held: Argument raised first on reconsideration and not considered—court affirmed district court’s refusal to reconsider (no abuse of discretion) |
| Whether Hummell factors weigh for an award here (culpability, ability to pay, deterrence, significance, relative merits) | Group Disability: all five factors (including pre-appeal bad faith and Sun Life’s ability to pay) favor awarding appellate fees | Sun Life: appellate arguments were novel and taken in good faith; limited practical significance under Micha weakens deterrence/benefit factors | Held: Considering full litigation, all Hummell factors favor Group Disability; district court abused discretion by ignoring pre-appeal conduct; case remanded to calculate fees |
Key Cases Cited
- Hummell v. S. E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980) (sets five-factor test for ERISA fee awards)
- Sokol v. Bernstein, 812 F.2d 559 (9th Cir. 1987) (requires consideration of pre-appeal bad faith when awarding appellate fees)
- Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (§ 1132(g)(1) permits fees when a party has achieved some success on the merits)
- Bandak v. Eli Lilly & Co. Ret. Plan, 587 F.3d 798 (7th Cir. 2009) (articulates an automatic-entitlement rule for fees-on-fees in pension-plan context)
- Jean v. Comm’r, I.N.S., 496 U.S. 154 (1990) (time spent establishing entitlement to fees is compensable under fee-shifting statutes)