Submitted August 22, 2016 [*]
from the United States District Court No.
3:09-cv-02753-JM-BGS for the Southern District of California
Jeffrey T. Miller, Senior District Judge, Presiding
S. Schechter and Corey F. Schechter, Butterfield Schechter
LLP, San Diego, California, for
Michael B. Bernacchi and Keiko J. Kojima, Burke Williams
& Sorensen LLP, Los Angeles, California, for
Before: Michael R. Murphy, [**] Kim M. Wardlaw, and Marsha S.
Berzon, Circuit Judges.
panel reversed the district court's denial of appellate
attorney's fees under 29 U.S.C. § 1132(g)(1) and
remanded for calculation of a reasonable award of fees and
costs in an ERISA case.
panel held that in analyzing a party's request for
appellate attorney's fees under the Hummell
test, a court must consider the entire course of the
litigation, rather than focusing exclusively on the prior
appeal. Weighing the five Hummell factors in light
of all of a defendant's conduct, from its wrongful denial
of the plaintiff's claim for ERISA benefits to its filing
of a petition for a writ of certiorari, the panel held that
the moving party was entitled to attorney's fees for the
prior appeal, in which the panel had affirmed an award of
litigation attorney's fees. The panel declined to
consider the issue, not raised before the district court,
whether fees-on- fees should be automatically awarded,
without application of the Hummell test.
Judge Berzon wrote that, were the panel reaching the issue,
she would hold that attorney's fees should be awarded
automatically on appeal to a party that successfully defends
the fees it was awarded at the district court, in ERISA cases
as in others.
MURPHY, CIRCUIT JUDGE.
court generally employs the five-part test set out in
Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th
Cir. 1980), to determine the appropriateness of awarding or
denying a 29 U.S.C. § 1132(g)(1) ERISA-based request for
appellate attorney's fees. See Credit Managers Ass'n
of S. Cal. v. Kennesaw Life & Accident Ins. Co., 25
F.3d 743, 752 (9th Cir. 1994); Operating Eng'rs
Pension Trusts v. B & E Backhoe, Inc., 911 F.2d
1347, 1356-57 (9th Cir. 1990). The question presented here is
whether in analyzing a party's request for appellate
attorney's fees within the Hummell rubric, a
court must consider the entire course of the litigation. The
decision in Sokol v. Bernstein, 812 F.2d 559, 561
(9th Cir. 1987), compels an affirmative answer to that
question. Accordingly, exercising jurisdiction pursuant to 28
U.S.C. § 1291, this court REVERSES the district
court's denial of appellate attorney's fees and
REMANDS the matter to the district court for calculation of a
reasonable award of fees and costs.
Micha v. Group Disability Benefits Plan, we affirmed
a § 1132(g)(1) award of litigation attorney's fees
in favor of Group Disability Benefits Plan ("Group
Disability") for Gynecologic Oncology Associates
Partners, LLC ("GOA"). 597 Fed.Appx. 905, 906-08
(9th Cir. 2014). Micha concluded (1) Group
Disability achieved "some success on the
merits"and (2) the district court did not abuse
its discretion in concluding the five Hummell
factors weighed in Group Disability's favor. Id.
at 907 (quotations omitted). Micha specifically
[w]hen, in the course of the underlying litigation, the
district court informed [Sun Life Assurance Company
("Sun Life")] it had serious concerns regarding Sun
Life's handling of [Dr. John] Micha's claim for
disability benefits, Sun Life settled the suit. When it did
so, Sun Life fully vindicated Group Disability's
interests in the lawsuit.
emphasized that the fee award in Group Disability's favor
was a "remnant of discarded precedent" and noted
that because of a significant, intervening change in this
court's case law, our unpublished disposition was
"likely of no practical significance to anyone other
than the parties on appeal." Id. at 906
Sun Life filed a Petition for a Writ of Certiorari, asserting
the unpublished disposition in Micha would have
wide-ranging repercussions. But see id. Sun
Life's petition for certiorari claimed Micha
would (1) increase litigation over fee awards and (2) expand
the class of individuals entitled to an award of
attorney's fees, not only with regard to ERISA but also
through "similar attorney's fees claims being filed
in federal courts outside of the ERISA context." Group
Disability filed an opposition to the petition and the
Supreme Court denied Sun Life's request for certiorari.
135 S.Ct. 2894 (2015).
a § 1132(g)(1) award of appellate attorney's fees
for prevailing in Micha, Group Disability filed a
Motion to Transfer Consideration of Attorney Fees on Appeal
to the District Court for Determination. See Ninth
Cir. R. 39-1.8 ("Any party who is or may be eligible for
attorneys fees on appeal to this Court may . . . file a
motion to transfer consideration of attorneys fees on appeal
to the district court . . . from which the appeal was
taken."). The panel granted the motion and before the
district court Group Disability asked that its request for
appellate attorney's fees be resolved with the
five-factor test set out in Hummell. The district
court concluded that despite having achieved some success on
the merits by prevailing on appeal, Group Disability was not
entitled to appellate attorney's fees under the
Hummell factors. The district court reasoned as
follows: (1) Sun Life did not act in bad faith or with
culpability as to the prior appeal because that appeal
presented a novel issue (i.e., whether a nominal defendant
could recover from a co-defendant based on the success of the
plaintiff's case); (2) Sun Life's ability to pay an
award was uncontested, but not determinative; (3) an award of
fees would not deter future misconduct because (a) the prior
appeal was not taken in bad faith and (b) Micha made
clear the "facts of this case are unlikely to be
repeated"; (4) the fourth factor, whether litigation
provided a benefit to all plan participants or resolved a
novel legal issue, was not implicated by Group
Disability's fee request; and (5) the relative merits of
the parties' positions on appeal favored Group
Disability, but only slightly because Sun Life's prior
appeal "was predicated upon fairly debatable legal
arguments involving a novel ERISA issue." As should be
clear from this recitation of the district court's
reasoning, in analyzing the Hummell factors, the
district court focused exclusively on Sun Life's actions
and arguments on appeal in Micha and refused to
consider Sun Life's conduct in the underlying suit Micha
brought for disability benefits.
Forfeited Bases to Reverse the District Court
Disability asserts we should adopt the Seventh Circuit's
automatic-entitlement rule and, on that basis, reverse the
district court's denial of appellate attorney's fees.
See Bandak v. Eli Lilly & Co. Ret. Plan, 587
F.3d 798, 803 (7th Cir. 2009) ("[A]ffirmance entitles an
appellee who has properly been awarded an attorney's fee
in the district court to an attorney's fee for
successfully defending the district court's judgment in
the court of appeals. Otherwise the purpose of the initial
award-to shift the cost of litigation to the losing
party-would be imperfectly achieved." (quoting
Sullivan v. William A. Randolph, Inc., 504 F.3d 665,
672 (7th Cir. 2007))). We decline to consider this issue
because it was never raised in the district court. See
Hillis v. Heineman, 626 F.3d 1014, 1019 (9th Cir.
Disability claims the district court erred when it failed to
apply a prevailing-party presumption in resolving its
entitlement to appellate attorney's fees. See United
Steelworkers of Am. v. Ret. Income Plan for Hourly-Rated
Emps. of ASARCO, Inc., 512 F.3d 555, 564 (9th Cir. 2008)
("[A]s a general rule, the prevailing party on an ERISA
claim is entitled to attorney's fees, unless special
circumstances would render such an award unjust."
(quotation omitted)). This issue was raised for the first
time in Group Disability's motion for reconsideration.
Citing this court's precedents, the district court
refused to consider the issue. See Kona Enters., Inc. v.
Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)
(holding that a motion for reconsideration "may not be
used to raise arguments or present evidence for first time
when they could reasonably have been raised earlier in the
litigation"). We review for abuse of discretion the
denial of a motion for reconsideration. Smith v. Pac.
Props. & Dev. Corp., 358 ...