*1 M.D., MICHA, John Paul Plaintiff,
individual CANADA, LIFE OF ASSURANCE
SUN
INC., corporation, Defen a Delaware
dant/Cross-Defendant/Appellee, Gy For Benefits Plan Partners, Oncology
necologic Associates liability c, limited a California
Ll
company, Defendant/Cross-Claim
ant/Appellant.
No. 16-55053 Appeals, Court
United States
Ninth Circuit. * August
Submitted
Filed October 12-55816, previous panel from of this *The No. risdtótion ju- retained Benefits
Marc Corey S. Schechter F. Schechter, LLP, Butterfield San Schechter California, Diego, for Defendant/Cross- ClaimantyAppellant.
Michael B. Bemacchi and Keiko J. Koji- ma, LLP, Burke Williams & Sorensen Los California, Angeles, for Defendant/Cross- Defendant/Appellee. MURPHY,**
Before: R. MICHAEL WARDLAW, KIM M. and MARSHA S. BERZON, Judges. Circuit by Judge Concurrence Berzon OPINION MURPHY, Judge: Circuit
I.
INTRODUCTION
generally
This
employs
the five-
out in
Ry
test set
Hummell v. S.E.
(9th
Co.,
1980),
&
swer XJ.S.P; to 28 jurisdiction pursuant cising [w]hen, underlying course of the *3 § the district this court REVERSES litigation, court district informed attorney’s denial court’s (“Sun Company Life Assurance- [Sun matter to the district and REMANDS Life”) regard- concerns it serious ] had of a for calculation reasonable award handling ing [Dr. John] Sun Life’s costs. fees and benefits, disability claim Sun Micha’s so, Sun Life the suit. When did settled II. BACKGROUND Disability’s Group Life fully vindicated Disability Group Micha In Benefits interests lawsuit. § a affirmed we Id.3 of Group in litigation attorney’s fees in Micha emphasized that the fee award (“Group Disability Benefits Plan Disabili- Disability’s favor a “remnant of Group was Oncology Associates ty”) Gynecologic (“GOA"). noted that Partners, Fed.Appx. precedent” and be- LLC discarded change significant, intervening cause a Micha conclud- 906-08 law, (1) unpublished our “some achieved ed in.this (2) practical no sig- disposition “likely was on the merits”2 success anyone to in con- nificance other than not abuse its discretion court did n.l,4 Id. at 906 Sun Life filed the five Hummell factors weighed cluding appeal.” Co., disability denying at 331 Micha benefits. fiOR 2. See Standard Ins. Hardt v. Reliance Life 242, 244-45, (“While trial, 130 S.Ct did not reach the court 560 U.S. this case (2010) (holding party findings Regarding need not in Order made L.Ed.2d its several ”prevail[]” a fee award under Scope to obtain of Review to Determine Motions instead, 1132(g)(1); court has discretion indicating assessing in Sun Life’s bad faith long grant claims,”).’ such award as finding to Based on its Sun Micha's degree of success on faith, some achieved “has .the Life acted in bad the district court con- omitted)). (quotations merits” eluded “the first and fifth factors awarding [litigation weigh in favor of attor- underlying court in the benefits district ney’s] Disability. Group to” Group Disability, dispute Micha and between Life, side, side, on one Sun on the other Micha, explained 4.As "ample was evidence” Sun concluded there' Disability employee Group is an welfare denying engaged Mi- Life in misconduct ,.. provide disability plan maintained to disability cha’s сlaim: employees Group .... to benefits [GOA] complaint appears central to be Plaintiff's disability from Disability purchased policy engaged pattern Life of con- Sun covering employees, Sun Life GOA’s includ- designed permit company to duct Dr, Micha, sought disability ing Micha John learning certain details about Plain- avoid Sun Life. When Sun Life de- require benefits would find tiff’s it to condition claim, Indeed, brought Micha suit policy. nied the him disabled under the- Disability. See ample Life review of the record finds evidenc'e Sun 132(a)(1)(B), § T support this contention. U.S.C. omitted) (em- (footnote Fed.Appx. response EOR 254. In to the district court’s phasis original). requiring The rule Micha as to misconduct conclusion Life, Disability sue to obtain benefits with Micha and Sun Life settled Thereafter, eventually by disability granted from Sun abandoned benefits. Life him banc; litiga- sitting Disability’s request granting Group this court en fees, specifi- Financial In In Everhart Allmerica tion district court cally Life acted in bad faith surance found Certiorari, asserting for a Petition Writ asked that for appellate attor- ney’s unpublished fees be disposition Micha resolved with the five-factor test set out wide-ranging repercussions.5 have Hummell.6 The would despite But concluded that petition having see id. Sun Life’s certiora- achieved some success (1) by ri litiga claimed increase prevailing on appeal, Group Disability was (2) expand tion over fee awards and not, to appellate attorney’s entitled class of entitled an award of individuals under the Hummell'factors. The district regard not only with (1) court reasoned as follows: Sun Life did through also attor ERISA but "similar act in with culpability as bad.faith ney’s being fees claims filed in federal n the prior appeal because pre- context.” courts outside (i.e., sented a novel issue whether a nomi- filed an *4 opposition the nal defendant could recover from a co- Supreme the Court petition and denied defendant based on the success of the — Sun Life’s for certiorari. U.S. (2) plaintiffs case); ability Life’s Sun to —, 2894, 192 926 135 S.Ct. L.Ed.2d uncontested, pay was awаrd but not (2015). determinative; (3) an award fees would § Seeking appel- award of (a) future misconduct deter because prevailing late for attorney’s fees' Mi- prior appeal the taken bad faith cha, Disability Group to filed Motion (b) clear Micha made the “facts of this Attorney Transfer Consideration Fees (4) unlikely to repeated”; case are be the on Appeal to the District Court Deter- factor, litigation provided fourth whether (“Any mination. See Ninth R. 39-1.8 plan to all or participants benefit resolved eligible party may who is attor- issue, legal implicated by a novel was not may to neys appeal this Court ... (5) Group Disability’s request; file to motion trаnsfer consideration parties’ positions merits of the relative attorneys fees on to appeal Disability, Group but favored .,. was tak- court slightly prior appeal because Sun Life’s en.”). panel granted the motion predicated upon fairly legal and “was debatable Disability before the district arguments involving a novel is- ERISA 2001), unnecessary disposition this court held U.S.C. ments are 1132(a)(1)(B) permit "does not suits -Request this Life’s for Judicial third-party against, a ben insurer recover unnecessary DENIED it is Notice is because when is not as functioning efits the insurer to take notice of documents in this contained Instead, plan under Ev- the erhart, administrator.” court’s docket. plan proper de ERISA was the fendant a suit for benefits. After the 6. The five are: Hummell factors filing complaint giving of the rise this (1) Cyr degree parties’ opposing this overruled Everhart. of the cul- faith; (2) Ins. Reliance Standard pability ability or bad 2011) (enbanc). fees; opposing parties satisfy award of original). (emphasis Id. at n. (3) whether an of fees opposing would deter others from 5. We GRANT Disability’s Motion circumstances; (4) acting under similar Take Judicial Notice to Exhibits 1 and 2. parties requesting sought whether Cty. Orange, Harris 682 F.3d participants to benefit all and beneficiaries 2012) ("We may judicial take plan significant of an ERISA or to resolve a record, undisputed public notice of matters ERISA; (5) legal quеstion regarding including or state documents on file federal (citation omitted)). partids’ positions. relative courts.” We DENY as to Exhibit motion because those docu Heineman, Hillis v. be clear from recita- sue.” should 2010).7 (9th Cir. reasoning, tion of the district court’s factors, analyzing the dis- the Hummell Prevailing-Party Presumption exclusively on trict court focused Group Disability claims the district arguments actions and Life’s pre apply court erred when failed Life’s and refused to consider Sun vailing-party presumption resolving underlying suit Micha conduct appellate attorney’s entitlement disability benefits. brought Steelworkers Am. v. Ret. See United Hourly-Rated Emps. Plan Income III. ANALYSIS ARCO, Inc., AS 2008) (“[A]s rule, general prevailing to Reverse the A. Forfeited Bases on an claim is entitled District Court special unless circum Rule 1. Automatic-Entitlement such an stances render award un omitted)). (quotation This issue was just.” asserts we should in Group for the first time Disabili raised automatic-enti- adopt the Circuit’s Seventh ty’s Citing motion for reconsideration. and, basis, reverse the tlement rule precedents, the district court re *5 appellate of attor- court’s denial district Kona fused consider the issue. See En Lilly v. Eli & ney’s Bandak Co. fees. See ters., 229 Bishop, Inc. v. Estate F.3d of (7th 2009) 798, Cir. 803 Ret. 587 F.3d (9th 2000) 877, (holding Cir. that a 890 (“[A]ffirmance appellee an entitles who has for “may motion reconsideration not be attorney’s an properly beеn awarded arguments present used raise evi attorney’s to an fee for they for time could rea dence first when successfully defending the district court’s sonably have been raised earlier appeals. of judgment in the court Other- for of litigation”). review abuse discre We of the initial award—to purpose wise for tion the denial of a motion reconsidera losing the cost of shift Props. Corp., Dev. tion. Smith v. Pac. & imperfectly party—would 2004). achieved.” (9th Cir. 358 F.3d We A. (quoting Randolph, Sullivan William no of in the dis perceive abuse discretion (7th 2007))). Inc., Cir. F.3d trict refusal to consider an issue court’s reasonably to consider this issue because been decline that could have raised We Group Disability’s original ap motion for raised in the district court. See was never hand, therefore, is, type gave unnecessary is the of fees-on-fees case that to decide It precedent rise to the automatic-entitlement rule. The whether extant Ninth Circuit would question adoption before court here prevent of an automatic-entitle- sole Group Disability was entitled to Managers was whether ment .rule. In Association Credit achieving California, appellate attorney’s some court held "[i]n Southern degree an considering appellate fees of success on the whether to award appropriateness 1132(g), must wherе the issue was the under 29 U.S.C. we consider 25 F.3d of a district court’s award of attor- the five Hummell factors.” 1994); Operating Eng’rs, ney’s that distinction is mean- fees. Whether see also (same). ingful enough panel key to allow a of this court to 1356-57 There is a dis- F.2d at adopt rule without and this the automatic-entitlement between those cases tinction Operating Engi- superseding involvement of the en banc court Managers In and both Credit grant deciding is a we leave for where this court was whether to matter neers litigated properly appellate appeals presented issue is raised and fees in case, district court. ERISA merits issues. This other pellate attorney’s fees.8 if reversе the district court used incorrect
legal
findings.
standards
reach its
Hope
B. HummeWs Multi-Factor Test
Workers,
v. Int’l Bhd.
Elec.
1986). Furthermore,
Group Disability asserts the dis
will reverse
if
denial
“it has
trict
analysis
of the Hummell fac
a definite
firm
conviction that the dis
legal
tors is infected with
error and its
trict court
judg
committed clear error of
appellate attorney’s
denial of
fees is mani
Int’l,
ment.”
Inc.,
United States v. Tucor
festly
In particular,
unreasonable.
1171, 1175(9th
Disability asserts the district court’s refus
al to
pre-appeal
consider
Life’s
con
The district court erred when it
improperly
analysis
duct
skewed its
refused
consider the full course of the
Hummell factors in
Sun Life. An
litigation, specifically including
Life’s
fees is
reviewed
conduct,
pre-appeal
in applying the Hum-
discretion,
though “any
abuse
elements mell factors to Group Disability’s request
legal analysis
statutory interpreta
Sokol,
attorney’s fees.9 See
tion
figure
which
in the district court’s
(“First,
the district court
decision are
de novo.”
reviewable
Fabbrini
found that
arbitrarily
Bernstein had acted
City Dunsmuir,
and,
thus,
capriciously
this appeal
2011)
omitted). Thus,
(quotation
have arisen had it not
been
reviewing
a district court’s
denial
his initial bad faith in handling
pens
ion.”).10
this court
Weighing
must
the five
fac-
is,
therefore, unnecessary
It
to address
defending
connection with
courts
prevailing-party presumption
whether the
set
the Ninth
appel-
Circuit
whether the
review
pursued
out in
United Steelworkers survived
Su-
lant
bad faith and not
Hardt,
preme
conduct,
Court’s
appellant’s
decision
560 U.S. at
whether the
re-
*6
244-45,
Having novel; Micha’s suit because the issue concluded raised was (3) Life nominal- defendant Sun fact the the under arose , defendаnt/plaintiff-in-interest decision, Everhart now-rejected the a situ- the proper vantage is likely ation that would not repeat, meant validity to review the of the dis- of. an award have no deterrent fee award,, easily trict court’s The district value. conclusion court’s rejects arguments Sun Life’s toas suc- regard -manifestly is unreasonable. cess on the merits. Sun Life contends First, an of award fees and costs deciding that whether an particularly not meaningful is when a de- appropriate, fee the award district can force the expenditure signif- fendant required court was focus the relief icant fees defend award. on its obtained own Thus, proper of litigation award every point behalf. At each and neces- up by appellate is backed award sary, Group Disability supported Mi- is generally sufficient deterrent disability cha’s benefits as wrongful conduct the consistent with the contract insurance it Second, ERISA defendant. When, purchased from Sun Life. the is legally consideration of faith bad underlying litigation, the course suspect because district refused it district court Life informed Sun had to consider pre-appeal Sun Life’s conduct regarding serious concerns Sun Life’s which, above, as discussed bad involved handling, of Micha’s for disability claim supra Finally, note 3. faith. benefits, settled suit. When (i.e., court’s third consideration so, fully Sun Life vindicated did relative unimportance of decision lawsuit, Disability’s interests Micha limits the deterrent effect According Micha, FedAppx. at 907. award) appellate is arguably inconsis- Group Disability’s interests were identical tent with the district court’s determination to, with, fully aligned Micha’s interests appellate that Sun Life’s was tak- conduct obtaining disability award of proper good ap- en in because faith the issue identity-of-interest benefits. That did not is, peal was novel. That fact undeniable disappear Life appealed when Sun the fee original district court’s award in favor Group Disability. award entirely fees was a product Life has no reason to offered conclude that Everhart decision now-discarded identity-of-interest disappeared when ana- vigorous makes Sun Life’s advo- appellate whether the Hummell factors lyzing weigh cacy, exemplified petition for by its certio- in favor of an of appellate award fees to rari, all the harder all understand and Disability. case, being That susceptible the more ef- deterrent rule of law Smith weighs set out of an fect *8 of an of particular favor fees in this award in district abused its con- discretion case. cluding this an weighed factor 3. Deterrence Instead, of appel- award of an award fees present late in in The district court the the circumstances concluded de appeal significant would have a weighed against terrence factor an award deter- (1) marginal of fees original bringing the fee rent effect of because: award the sufficiently companies of appeals deterred insurance a misconduct-based denial after see benefits, appellate of fees swpra note led an award to an of discretion. amounts abuse of fees and costs.
an award Legal Significance IV. CONCLUSION of Issue/Benefit Participants All Plan above, those set out the For reasons Group Disability’s of Micha held that resolution of Sun district court’s denial fees significance appellate motion practical had no appeal Life’s matter is is and the appeal. on 597 costs REVERSED anybody but for the REMANDED to the district court at 906 n.l. Because Fed.Appx. of of award appeal with limited calculation a reasonable vigorously pursued way through all and costs. practical significance certiorari, a writ of this factor petition for BERZON, Judge, concurring: Circuit
weighs in of an award of fees favor Disability.11 Group opinion in follow- I concur with the ing observations: Relative Merits issue,1 reaching I Were we Positions Parties’ Supreme precedent that Court hold both Disability prevailed on Group that Given compel the and our own case law conclu- Micha, every matter at issue district that ERISA fees should sion correctly concluded this factor fa- on to a appeal be awarded Group because an award vored successfully the fees it was award- defends prevailed Disability way, at the district court. Put another ed viewed, the Hummell nigh should be unto auto- Properly each “fees-on-fees” matic, appellate of an in ERISA cases as others. We weighs factors favor fee the Hummell troop through not The district should Disability. award factors, Rykoff see Hummell v. S. E. & contrary conclusion and denial of Disability weigh concluding Group con- concluding did not erred in 11. In this factor factоr, fees, inapplicability of this entire ceded the of an award district court conceding inapplicability "Group Disability instead of as follows: admits stated portion benefit-to-other-participants weigh not in favor of an that this factor does Instead, factor. Group Disability fourth Hummell ar- award of fees. largely gues inapplicable is this factor dispute notes, should therefore be opinion an individual 1. As the main inapplicable here.” The affirmatively deemed use of the fac- invited misreading upon analyzing is based court’s decision for the fees tors fees, Group arguing exclusively In its the record. to the dis- that basis argued Only Disability specifically Op. ap- that because the trict at 1055-56. court. grounded Disability peal fee well in law assert that award was did nearly always equity, Life's award for the suc- fees are available significant legal present It is We issue. cessful defense of a award. have dis- did certainly reply support raised for true in its cretion to “consider an issue presented conceded that if the issue is first time factor, portion purely opposing party will the other benefit one of law and the however, others, Notably, prejudice United States irrelevant. suffer no as a result.” Valdez-Novoa, nothing Group Disability’s reply there is omitted). 2015) (internal withdrawing previous argument quotation that be- marks majority оpted present not to exercise that discre- cause Sun Life’s did has issue, Op. I legal 1055-56. accede to that significant this factor still favored tion here. See Thus, district court *9 an award of fees. decision.
1061
446,
(9th
1980),
impose
634 F.2d
453
Cir.
with ment
could
cost
...,
regard
appeal—even though,
prevailing parties
to the fees
as
the financial de
illustrates,
terrent
that the EAJA aims to
opinion in this
eliminate
resurrected.”);
would be
Ne. Ohio
doing
properly
likely
result of
so
is
anoth
Coal.
Husted,
the Homeless v.
831 F.3d
er fee award.
(6th
2016)
724-25
Cir.
(“[Diluting the
fee-shifting
The case law
statutes is
by failing
provide
overall fee award
fully
See,
Comm’r,
e.g.,
well-settled.
I.N.S. v.
compensatory fees
fees undermines the
Jean,
154, 161-63,
496
110
U.S.
S.Ct.
congressional
1988],
intent
[§
behind
(1990);
134
Cootеr & Gell
L.Ed.2d
encourage
private
which is to
prosecu
384, 408-09, 110
Corp.,
Hartmarx
496 U.S.
tion of
rights
through
civil
suits
the trans
(1990).
S.Ct.
L.Ed.2d
fer
costs
to those who
uniformly held that
have
time
“[C]ourts
(internal
infringe upon
rights.”
basic civil
spent establishing
the entitlement
omitted)).
cases,
quotation marks
In such
compensable
amount
the fee is
under
if fee-shifting is to mean anything, it must
”
fee-shifting provisions .... Blix
federal
prevailing party actually
mean that
Club, LLC,
seth Yellowstone Mountain
award,
obtains the
of its fee
benefit
rather
(9th
626, 629
854 F.3d
Cir.
We have
depleting
than
or
it in
exhausting
the inev
applied
con
principle
numerous
litigation. Moreover,
itable follow-on
if the
See,
(fees
e.g.,
texts.
id.
under 28 U.S.C.
party prevailing
get
as to fees will not
its
1927);
Developers,
In re S. Cal. Sunbelt
award,
defending
full fees for
op
(9th
2010) (fees
Inc.,
456, 462
608 F.3d
posing
leverage
party has
to force a dis
involuntary
following dismissal of an
bank
settlement,
count to the fee award
with
ruptcy petition);
Bridgeport
Camacho v.
pursuing
expending
out
Fin.,
973, 978,
Inc., 523 F.3d
Husted,
attorneys’
own
do so.
2008) (fees under the Fair Debt Collection
at 724.
Act);
Kinney
see also
v. Int’l
Practices
There is no
that the
doubt
ERISA fees
Workers,
Bhd.
Elec.
here,
provision
issue
U.S.C.
1991) (common-law fee-shifting).
§ 1132(g)(1),
fee-shifting provision
is a
underlying logic
The
is that unless se
by
precedents.
the sort covered
these
curing
a fee entitlement
is cost-
contemplates
provision
that a
party
on the
free
awarded fees
mаy
award reasonable fees
costs
merits, the initial fee
will be effec
by participant,
...
action
bene-
“[i]n
eliminated,
tively
or
reduced
fundamental
added).
ficiary,
fiduciary.”
(emphasis
or
ly undermining
purposes
the fee- A
plain reading
language
makes
shifting provision.
Lilly
See Bandak v. Eli
Congress
clear that
intended the fee-shift-
& Co. Ret.
ing
provision
apply
the “action” as a
2009); Camacho,
Atkins v. F.3d Cir.
1998). statute, a fee-shifting Under question is
threshold entitlement answered
only once. notes, opinion pre- has
viously separate conducted Hummell
analysis for fees on an ERISA awarded Operating
merits appeal. Eng’rs Pension Backhoe, Inc., B
Trusts v. & E
F.2d
(9th
1990);
Op.
see also
discussion,
majority
point
I am
confident
less
than
assumes a
without
panels.”).
Managers
case does
bind future
Credit
can be
as merits
described
Managers
Ass'n
Credit
S. Cal v.
requires
single fee
5. Because Jean
entitle
& Acc. Ins.
Kennesaw
F.3d
fee-shifting
ment decision
statutes
under
such
even
But
as a fees-on-fees
this,
approach
Operating Engi
taken in
case,
Managers
preclude
does not
Credit
separate
analysis for
entitlement
neers—a
de
Managers
automatic entitlement here. Credit
fending
victory
appeal—is
almost
governed,
assumed Hummell
without consid
wrong.
certainly
present
But as the
case con
ering any possible fees-on-fees distinction. Id.
appeal, Operating
cerns
nonprecedential
752. It is
therefore
Engineers
application.
has no direct
More
Mink,
point.
See Sorenson v.
F.3d
over,
Operating
Managers,
Engi
like Credit
2001) ("[U]nstated assumptions
assumes,
explanation,
neers
without
non-litigated
precedential
issues are not
applies
a second time to
(citation
holdings binding
future decisions.”
likely
panels.
and so
does not bind future
omitted));
C.I.R.,
Magnin
1356-57;
Estate
Operating Engineers,