Toussaint v. JJ Weiser, Inc.
648 F.3d 108
2d Cir.2011Background
- Plaintiffs-Appellees are Roger Toussaint et al., retirees association and members; Defendants are JJ Weiser, Inc. and others as former directors of the retirees association.
- In an underlying ERISA action, plaintiffs alleged fiduciary breaches related to a health insurance policy with premiums far exceeding benefits.
- The district court granted summary judgment for defendants and denied defendants’ § 1132(g)(1) attorney’s fees.
- Defendants appealed after the denial of fees pursuant to 29 U.S.C. § 1132(g)(1).
- Hardt v. Reliance Standard Life Insurance Co. (2010) clarified the standard for eligibility for § 1132(g)(1) fees as “some degree of success on the merits.”
- The Second Circuit affirmed, holding that a court may consider Chambless factors but is not required to apply them, and that the district court did not abuse its discretion in denying fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hardt v. Reliance affects fee eligibility under § 1132(g)(1). | Toussaint argues Hardt requires reanalysis of fee eligibility. | Weiser argues the Chambless framework controls and Hardt is inapplicable to reversal. | Hardt does not require reversal; some degree of success suffices for eligibility. |
| Whether Chambless factors must govern the fee-denial decision post-Hardt. | plaintiffs contend factors support denying fees due to good-faith claims. | defendants contend the Chambless factors dictate the outcome. | A court may apply but is not required to apply Chambless factors. |
| Whether the district court abused its discretion in denying fees given plaintiffs’ good-faith position. | plaintiffs maintain the action was in good faith and deserving of no fee shift. | defendants claim the action lacked sufficient merit to deny fees. | No abuse; district court did not err in denying fees. |
Key Cases Cited
- Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869 (2d Cir. 1987) (five-factor test for § 1132(g)(1) fee awards)
- Hardt v. Reliance Standard Life Insurance Co., U.S. , 130 S. Ct. 2149 (Supreme Court, 2010) (fee eligibility requires some degree of success on the merits)
- Salovaara v. Eckert, 222 F.3d 19 (2d Cir. 2000) (ERISA fee awards often favor plaintiffs to prevent chilling effect)
- McDonald ex rel. Prendergast v. Pension Plan of the NYSA-ILA Pension Trust Fund, 450 F.3d 91 (2d Cir. 2006) (district court deference in reviewing fee awards)
- Zervos v. Verizon N.Y., Inc., 252 F.3d 163 (2d Cir. 2001) (deferential review of fee determinations)