Michael Woolsey v. Aetna Life Insurance Company

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 20, 2022
• Docket: 20-16885
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 20 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT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. 1 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

2 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

3 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

4 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

5 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.