Shirley Temme v. Bemis Company, Incorporated
762 F.3d 544
7th Cir.2014Background
- Plaintiffs, a former Hayssen/ Bemis employee class, sought to restore lifetime medical benefits under a Plant Closing Agreement with Bemis’s predecessor.
- Bemis acquired Hayssen in 1996 and assumed the obligation to provide benefits; it later reduced benefits in 2005 and 2007, and eventually eliminated the prescription drug program.
- Plaintiffs sued under ERISA and LMRA; Judge Stadtmueller granted summary judgment for Bemis, which was later reversed by the Seventh Circuit (Temme v. Bemis).
- Remand led to settlement prior to trial; plaintiffs then sought ERISA-fee awards for attorney fees incurred through trial preparation, appeal, and related work.
- Magistrate judge awarded attorney’s fees totaling $403,053.75 after applying five-factor test and the “substantially justified” test; Bemis appealed the fee award on grounds of substantial justification and framework.
- Court affirms the fee award, finding no abuse of discretion in the magistrate’s analysis or in ERISA as the governing framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the proper standard of review for attorney-fee awards in this ERISA case? | Plaintiff argues for a stricter standard due to remand and judge familiarity. | Bemis argues for a stricter standard because the magistrate did not develop case familiarity. | Abuse-of-discretion standard applies; review is deferential. |
| Is ERISA the proper framework to award fees in this case rather than LMRA/contract analysis? | ERISA governs the plan and enforces benefits hence fee shifting. | The dispute involves a plan-like benefit; could be LMRA/contract. | ERISA is the proper framework for fee awards. |
| Do third-party financings defeat a fee award under ERISA? | Financing by a union or third parties should not bar fees. | Financing could undermine fee liability. | Third-party financing does not automatically bar an award. |
| Did plaintiffs achieve some degree of success on the merits to justify fees? | Settlement provided benefits at or near pre-2007 levels, reflecting success on merits. | Not all relief sought was achieved; success was limited. | Yes, plaintiffs achieved some degree of success on the merits. |
| Did the district court abuse its discretion in applying the five-factor test and the “substantially justified” standard? | District court properly weighed factors and found substantial justification. | Position was substantially justified only in part. | No abuse of discretion; the five-factor analysis supported the award. |
Key Cases Cited
- Temme v. Bemis, 622 F.3d 730 (7th Cir. 2010) (reversed district court on summary judgment; discussed lifetime benefits)
- Kolbe & Kolbe Health & Welfare Benefit Plan v. Med. Coll. of Wis. Inc., 657 F.3d 496 (7th Cir. 2011) (describes two ERISA fee-test approaches (five-factor and substantially justified))
- Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (Supreme Court 2010) (some degree of success required for fee awards under ERISA)
- Raybourne v. Cigna Life Ins. Co. of New York, 700 F.3d 1076 (7th Cir. 2012) (affirmed use of substantiality framework post-Hardt)
- Donachie v. Liberty Life Assur. Co. of Boston, 745 F.3d 41 (2d Cir. 2014) (discusses integrating Hardt with five-factor analysis)
- CIGNA Corp. v. Amara, 131 S. Ct. 1866 (Supreme Court 2011) (discusses plan terms and ERISA interpretation)
- Pierce v. Underwood, 487 U.S. 552 (1988) (substantiality inquiry related to litigation positions)