This court has not decided previously the question of whether ERISA provides for an award of attorney’s fees and costs incurred in pre-litigation administrative proceedings. However, six other circuit courts of appeals have considered the question. All six have determined that, as a matter of law, ERISA does not provide for such an award.

Lisa Kahane v. UNUM Life Ins. Co. of America, 03-30-2009 Case#: 08-15022

In this case the Eleventh Circuit rejected a claim for attorney’s fees for time expended in a “claims reassessment” process offered by UNUM to claimants whose claims had been denied.

After suit was filed following a denial of benefits, the disability claimant received a letter from UNUM offering a claims reassessment as a part of a program instituted by the company in cooperation with states’ attorney general offices.

As a result of the claim reassessment process, UNUM agreed to reinstate payment of the claimant’s benefits retroactively.  All of her [Kahane’s] claims against UNUM, with the exception of her claim for attorney’s fees and costs, were resolved. Kahane voluntarily dismissed all of the resolved claims but moved the district court for an award of all attorney’s fees and costs she incurred in the matter.

The issue thus arose as to whether the claimaint’s attorney was entitled to attorneys’ fees and if so, as to what portion of the time expended. 

The Court held that the claim reassessment process is “substantially similar to the pre-litigation administrative procedures required by ERISA.” The Court also held that attorney’s fees and costs for pre-litigation administrative procedures are not recoverable under 29 U.S.C. § 1132(g)(1) and thus are also notrecoverable for the claim reassessment process.

Note:   The opinion collects cases from  six other circuit courts of appeals  that have considered the question.  (”All six have determined that, as a matter of law, ERISA does not provide for such an award.”)

 See Hahnemann Univ. Hosp. v. All Shore, Inc., 514 F.3d 300, 313 (3d Cir. 2008) (“[T]he fees incurred during administrative proceedings prior to filing suit are unavailable under 29 U.S.C. § 1132(g)(1).”); Parke v. First Reliance Standard Life Ins. Co., 368 F.3d 999, 1011 (8th Cir. 2004) (“[T]he term ‘any action’ in 29 U.S.C. § 1132(g)(1) does not extend to pre-litigation administrative proceedings.”); Rego v. Westvaco Corp., 319 F.3d 140, 150 (4th Cir. 2003) (“[H]ere we agree with our sister circuits that have held ERISA attorney’s fees to be categorically unavailable for expenses incurred while exhausting administrative remedies.”); Peterson v. Cont’l Cas. Co., 282 F.3d 112, 121 (2d Cir. 2002) (“ERISA authorizes the award only for fees incurred in relation to a suit filed in a court of competent jurisdiction. Therefore, [the Plaintiff] may not collect fees incurred during the initial administrative process.”); Anderson v. Procter & Gamble Co., 220 F.3d 449, 455 (6th Cir. 2000) (“[Section] 1132(g)(1) should not be interpreted to permit fee awards for legal expenses incurred in the course of exhausting administrative remedies.”); Cann, 989 F.2d at 316 (“We construe [§ 1132(g)(1)] as limiting the award to fees incurred in the litigation in court.”).

Now there are seven.

We join these other circuits in holding that § 1132(g)(1) does not authorize awards for work done in pre-litigation administrative proceedings. We do so for the reason stated by the Fourth Circuit, namely, by requiring the exhaustion of administrative remedies, it was Congress’s “‘desire not to create a system that is so complex that administrative costs, or litigation expenses, unduly discourage employers from offering welfare benefits plans in the first place.’” Rego, 319 F.3d at 150 (quoting Varity Corp. v. Howe, 516 U.S. 489, 497, 116 S. Ct. 1065, 1070 (1996))