Michael Woolsey v. Aetna Life Insurance Company ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAY 20 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MICHAEL WOOLSEY, No. 20-16885
Plaintiff-Appellant, D.C. No. 2:18-cv-00578-SMB
v.
MEMORANDUM*
AETNA LIFE INSURANCE COMPANY,
Defendant-Appellee,
and
UBS FINANCIAL SERVICES, INC.,
Defendant.
Appeal from the United States District Court
for the District of Arizona
Susan M. Brnovich, District Judge, Presiding
Argued and Submitted March 7, 2022
Phoenix, Arizona
Before: HAWKINS, PAEZ, and WATFORD, Circuit Judges.
Michael Woolsey appeals the district court’s order denying his motion for
attorneys’ fees under the Employee Retirement Income Security Act (ERISA),
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
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following a remand on his claim for benefits to Aetna. We have jurisdiction under
28 U.S.C. § 1291. We review an award of fees for abuse of discretion, but “any
elements of legal analysis and statutory interpretation which figure in the district
court’s decision are reviewable de novo.” Micha v. Sun Life Assurance of Canada,
Inc., 874 F.3d 1052, 1057 (9th Cir. 2017) (citation omitted). A district court errs if
it “misperceives or misapplies the law governing fee awards.” Coal. for Clean Air
v. S. California Edison Co., 971 F.2d 219, 229 (9th Cir. 1992). Because the district
court’s remand order, on this record, constitutes “some success on the merits,”
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 256 (2010), we reverse and
remand for further proceedings.
1. ERISA provides that “the court in its discretion may allow a reasonable
attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g)(1). To be
eligible for such an award, a claimant must show “some success on the merits.”
Hardt, 560 U.S. at 256. A “trivial success” or “purely procedural” victory is not
enough, but courts should neither conduct a “lengthy inquir[y] into the question
whether a particular party’s success was ‘substantial’ or occurred on a ‘central
issue.’” Id. at 255 (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 688 n.9
(1983)).
In ruling on Woolsey’s motion for summary judgment and motion to
supplement the record, the district court rejected a number of Woolsey’s arguments
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but also concluded that Aetna erred in several critical respects. The district court
determined that a remand was warranted because Aetna (1) failed to assess the
aggregate effect of Woolsey’s medical conditions; (2) gave dismissive treatment to
reports from his treating specialists; (3) failed to address specific vocational
requirements as required by the plan; (4) failed to inform Woolsey of a deficiency
in the record and to consider those missing records; (5) failed to disclose
independent reviewers’ reports; (6) failed to adequately explain what was
necessary to correct the record; and (7) failed to adequately investigate his
physicians’ reports. While the procedural errors and deficiencies did not warrant
de novo review, the district court concluded that their cumulative effect prevented
a full development of the record and a “full and fair review.” See 29 U.S.C.
§ 1133(2).
As a result, the district court remanded the claim to Aetna to correct its
procedural deficiencies, including allowing Woolsey to supplement the record with
psychological or functional testing. The court also ordered Aetna to consider
Woolsey’s Social Security Administration disability award even though it was
awarded after Aetna’s initial review.
2. Upon review of Woolsey’s motion for attorneys’ fees, the district court
erred in its application of the Hardt standard. In concluding that Woolsey’s
success was insufficient because he did not prevail on his central claims, the
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district court failed to heed the Supreme Court’s admonition to avoid a “lengthy
inquiry” into “whether a particular party’s success was ‘substantial’ or occurred on
a ‘central issue.’” Hardt, 560 U.S. at 255 (quoting Ruckelshaus, 463 U.S.at 688,
688 n.9). Further, to constitute “some success on the merits,” id. at 256, the
standard does not require a remand order to provide an assessment of the plaintiff’s
ultimate eligibility for benefits. To be sure, the Supreme Court declined to
determine what relief would constitute the minimum success, as Hardt had
“achieved far more.” Id. The Court, however, did not suggest that “some success”
was limited to the circumstances of the remand order in Hardt. Rather, the Court’s
characterization of the remand as “far more” than a trivial or purely procedural
success, and its decision not to set that remand as the minimum threshold, see id.,makes clear that less favorable relief can also meet that standard.
3. Nor was the remand order a “purely procedural victory,” id., as the district
court characterized it. A remand for further administrative proceedings, even
without a positive signal on the plaintiff’s eligibility for benefits or a subsequent
award of benefits, can constitute some success “on the merits” under Hardt. What
is critical in this context is that the court determined the administrative process was
significantly deficient, and that the plaintiff obtained a renewed opportunity to
secure benefits. Notably, the Supreme Court did not limit its discussion of Hardt’s
case to the district court’s assessment of her claim or the administrator’s award of
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benefits. See id. at 255-56. The Court further emphasized how the district court
found the administrator failed to comply with ERISA, found that Hardt did not get
the review she was entitled, and ordered the administrator to provide Hardt the
“statutorily mandated” review of her claim. Id.The district court’s remand order followed a substantive review of
Woolsey’s claims. The court ultimately concluded that Aetna failed to comply
with ERISA and failed to provide Woolsey the administrative process to which he
was entitled. The court therefore provided him with a renewed opportunity to
obtain benefits on a supplemented record. Moreover, because the record was not
fully developed (as the district court so concluded), the court was in no position to
assess the merits of Woolsey’s claim for benefits. Cf. Abatie v. Alta Health and
Life Ins. Co., 458 F.3d 955, 973 (9th Cir. 2006) (en banc) (explaining that the court
cannot assess the effect of a failure to provide a “full and fair review” without
additional evidence). Finally, the fact that Woolsey’s complaint did not expressly
seek a remand is also of no consequence. Woolsey alleged the relevant ERISA
violations and sought a remand in the alternative as part of his summary judgment
motion.
We do not, and need not, hold that any “remand order, without more” is
sufficient for an award of attorneys’ fees under ERISA. Hardt, 560 U.S. at 256.
For the above reasons, the district court’s remand order constitutes “some success
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on the merits.” Id. On remand, the district court should apply the Hummell factors
to determine if an award of fees is warranted. Simonia v. Glendale Nissan/Infiniti
Disability Plan, 608 F.3d 1118, 1119 (9th Cir. 2010).
REVERSED AND REMANDED.
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