Attorneys' Fee Awards in ERISA Cases: McKennon Law Group PC Gets A Large One

Most employee benefits are governed by a federal law called the Employee Retirement Income Security Act of 1974 (“ERISA”), including life insurance, health insurance, disability insurance, pensions and other benefits offered by employers to their employees through their employee benefit plans. Sometimes the plan, or an insurance company if the plan’s benefits are funded by an insurance policy, wrongfully refuses to pay benefits that are due to an employee. If an employee files a successful ERISA lawsuit to collect his plan benefits, he is entitled to recover his attorneys’ fees incurred in the lawsuit. The applicable ERISA statute, 29 U.S.C. section 1132(g)(1), states: “In any action under this subchapter . . . by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” In Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), the Supreme Court interpreted that statute and concluded a plan participant is entitled to recover his “reasonable attorneys’ fees” if he achieves some degree of success on the merits of the case.

That begs the question. What are reasonable attorneys’ fees in an ERISA case? The hourly rates charged by ERISA lawyers and the amount of time spent on a case can vary greatly, depending on the experience, skill and reputation of the attorney involved and the complexity of the matter. Hourly rates of up to $700 for highly experienced attorneys have been approved for ERISA cases by California federal district courts, including fee awards in the multiple hundreds of thousands of dollars.

The McKennon Law Group PC recently obtained such an award in Reddick v. Metro. Life Ins. Co., No. 3:15-CV-02326-L-WVG, 2018 WL 637938 (S.D. Cal. Jan. 31, 2018), where the Court approved its hourly rates of up to $700 and awarded it 100% of its fees, almost $300,000. We prevailed in that ERISA lawsuit filed against Metropolitan Life Insurance Company (“MetLife”), our client’s group long-term disability insurer, after MetLife terminated his benefits. Our client was a financial advisor that could no longer perform his job duties because of debilitating, post-surgical low back pain and impaired concentration caused by his pain medication. On the eve of trial, after the McKennon Law Group PC prevailed on two critical evidentiary motions, the disability insurer capitulated and agreed to pay our client all his benefits. The insurer, however, offered to pay just a small fraction of the firm’s attorneys’ fees and costs, contending they were unreasonable in amount. We promptly filed a motion to recover our attorney’s fees, which MetLife vigorously opposed.

On January 31, 2018, in a detailed 11-page opinion, the Honorable Judge M. James Lorenz of the United States District Court for the Southern District of California granted our motion. The Court ordered MetLife to pay 100% of our attorneys’ fees (and some costs), together totaling $294,391. Judge Lorenz concluded that the firm’s hourly rates of $700, $600 and $290 for Robert McKennon, Joseph McMillen and Stephanie Talavera, respectively, are reasonable for ERISA work given their strong experience and outstanding abilities, including decades handling insurance coverage, ERISA and bad faith insurance lawsuits. Judge Lorenz concluded that every minute of the firm’s time spent on the case was reasonable and recoverable from the disability insurer, MetLife:

[C]onsidering the quality of the work produced by [McKennon Law Group PC] and the successful result obtained, the Court finds reasonable the 515.1 hours counsel spent on this case.

Key Take Away
You should hire an experienced ERISA lawyer to represent you if your claim for life, health, disability or pension benefits is denied, even if they are more expensive than a less qualified lawyer. The law permits you to recoup your reasonable attorneys’ fees from the insurer or plan that wrongfully denied your benefits. Thus, it is the insurer that will end up paying for your better-quality representation, not you. In the Reddick v. MetLife case, our client was able to keep 100% of his long-term disability insurance benefits.

If your claim for short-term disability, long-term disability, life, retirement or health benefits has been denied, you can call (949) 387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling both ERISA insurance claims and non-ERISA California insurance bad faith claims.

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