FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOHN PAUL MICHA, M.D., an No. 16-55053
individual
Plaintiff, D.C. No.
3:09-cv-02753-
v. JM-BGS
SUN LIFE ASSURANCE OF CANADA, OPINION
INC., a Delaware corporation,
Defendant/Cross-
Defendant/Appellee,
GROUP DISABILITY BENEFITS PLAN
FOR GYNECOLOGIC ONCOLOGY
ASSOCIATES PARTNERS, LLC, a
California limited liability company,
Defendant/Cross-
Claimant/Appellant.
Appeal from the United States District Court
for the Southern District of California
Jeffrey T. Miller, Senior District Judge, Presiding
Submitted August 22, 2016*
Filed October 31, 2017
*
The previous panel from No. 12-55816, Micha v. Group Disability
Benefits Plan, retained jurisdiction of this appeal.
2 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
Before: Michael R. Murphy,** Kim M. Wardlaw,
and Marsha S. Berzon, Circuit Judges.
Opinion by Judge Murphy;
Concurrence by Judge Berzon
SUMMARY***
ERISA / Attorney’s Fees
The 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.
The 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-
**
The Honorable Michael R. Murphy, Senior Circuit Judge for the
U.S. Court of Appeals, Tenth Circuit, sitting by designation.
***
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 3
fees should be automatically awarded, without application of
the Hummell test.
Concurring, 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.
COUNSEL
Marc S. Schechter and Corey F. Schechter, Butterfield
Schechter LLP, San Diego, California, for Defendant/Cross-
Claimant/Appellant.
Michael B. Bernacchi and Keiko J. Kojima, Burke Williams
& Sorensen LLP, Los Angeles, California, for
Defendant/Cross-Defendant/Appellee.
4 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
OPINION
MURPHY, Circuit Judge:
I. INTRODUCTION
This 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.1 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.
II. BACKGROUND
In Micha v. Group Disability Benefits Plan, we affirmed
a § 1132(g)(1) award of litigation attorney’s fees in favor of
1
We specifically emphasize the qualifier “generally.” As set out
infra, there may well exist exceptions to the rigid applicability of the
Hummell test. For reasons that will soon become apparent, however, this
is not the appropriate case to explore the existence of any such exceptions.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 5
Group Disability Benefits Plan (“Group Disability”) for
Gynecologic Oncology Associates Partners, LLC (“GOA”).
597 F. App’x 905, 906–08 (9th Cir. 2014). Micha concluded
(1) Group Disability achieved “some success on the merits”2
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 recognized that
[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.
Id.3
2
See Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 244–45
(2010) (holding a party need not “prevail[]” to obtain a fee award under
§ 1132(g)(1); instead, a court has discretion to grant such an award as long
as the party “has achieved some degree of success on the merits”
(quotations omitted)).
3
The district court in the underlying benefits dispute between Micha
and Group Disability, on one side, and Sun Life, on the other side,
concluded there was “ample evidence” Sun Life engaged in misconduct
in denying Micha’s disability claim:
Plaintiff’s central complaint appears to be that Sun Life
engaged in a pattern of conduct designed to permit the
company to avoid learning certain details about
Plaintiff’s condition that would require it to find him
6 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
Micha 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 n.1.4 Sun Life filed a Petition for a
disabled under the policy. Indeed, a review of the
record finds ample evidence to support this contention.
EOR at 254. In response to the district court’s conclusion as to
misconduct on the part of Sun Life, Sun Life settled with Micha and
granted him disability benefits. Thereafter, in granting Group Disability’s
request for litigation attorney’s fees, the district court specifically found
Sun Life acted in bad faith in denying Micha disability benefits. EOR at
331 (“While this case did not reach trial, the court made several findings
in its Order Regarding Motions to Determine Scope of Review . . .
indicating Sun Life’s bad faith in assessing Micha’s claims.”). Based on
its finding Sun Life acted in bad faith, the district court concluded “the
first and fifth Hummell factors weigh in favor of awarding [litigation
attorney’s] fees to” Group Disability. Id.
4
As explained in Micha,
Group Disability is an employee welfare plan . . .
maintained to provide disability benefits to [GOA]
employees . . . . Group Disability purchased a
disability policy from Sun Life covering GOA’s
employees, including Dr. John Micha. Micha sought
disability benefits from Sun Life. When Sun Life
denied the claim, Micha brought suit against Sun Life
and Group Disability. See 29 U.S.C. § 1132(a)(1)(B).
597 F. App’x at 906 (footnote omitted) (emphasis in original). The rule
requiring Micha to sue Group Disability to obtain benefits from Sun Life
was eventually abandoned by this court sitting en banc:
In Everhart v. Allmerica Financial Life Insurance Co.,
275 F.3d 751, 756 (9th Cir. 2001), this court held that
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 7
Writ of Certiorari, asserting the unpublished disposition in
Micha would have wide-ranging repercussions.5 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).
Seeking 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
29 U.S.C. § 1132(a)(1)(B) “does not permit suits
against a third-party insurer to recover benefits when
the insurer is not functioning as the plan administrator.”
Instead, under Everhart, the ERISA plan was the proper
defendant in a suit for benefits. Id. After the filing of
the complaint giving rise to this appeal, this court
overruled Everhart. Cyr v. Reliance Standard Life Ins.
Co., 642 F.3d 1202, 1207 (9th Cir. 2011) (en banc).
Id. at 906 n.1 (emphasis in original).
5
We GRANT Group Disability’s Motion to Take Judicial Notice as
to Exhibits 1 and 2. See Harris v. Cty. of Orange, 682 F.3d 1126, 1132
(9th Cir. 2012) (“We may take judicial notice of undisputed matters of
public record, including documents on file in federal or state courts.”
(citation omitted)). We DENY the motion as to Exhibit 3 because those
documents are unnecessary to the disposition of this appeal. Sun Life’s
Request for Judicial Notice is DENIED because it is unnecessary to take
notice of documents contained in this court’s docket.
8 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
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.6 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
6
The five Hummell factors are:
(1) the degree of the opposing parties’ culpability or
bad faith; (2) the ability of the opposing parties to
satisfy an award of fees; (3) whether an award of fees
against the opposing parties would deter others from
acting under similar circumstances; (4) whether the
parties requesting fees sought to benefit all participants
and beneficiaries of an ERISA plan or to resolve a
significant legal question regarding ERISA; and (5) the
relative merits of the parties’ positions.
634 F.2d at 453.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 9
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.
III. ANALYSIS
A. Forfeited Bases to Reverse the District Court
1. Automatic-Entitlement Rule
Group 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. 2010).7
7
It is, therefore, unnecessary to decide whether extant Ninth Circuit
precedent would prevent the adoption of an automatic-entitlement rule.
In Credit Managers Association of Southern California, this court held
that “[i]n considering whether to award appellate fees under 29 U.S.C.
10 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
2. Prevailing-Party Presumption
Group 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 F.3d 1097, 1100 (9th Cir. 2004). We perceive no
§ 1132(g), we must consider the five Hummell factors.” 25 F.3d 743, 752
(9th Cir. 1994); see also Operating Eng’rs, 911 F.2d at 1356–57 (same).
There is a key distinction between those cases and this appeal. In both
Credit Managers and Operating Engineers this court was deciding
whether to grant appellate fees in appeals that presented ERISA merits
issues. This case, on the other hand, is the type of fees-on-fees case that
gave rise to the automatic-entitlement rule. The sole question before the
district court here was whether Group Disability was entitled to appellate
attorney’s fees for achieving some degree of success on the merits in an
appeal where the only issue was the appropriateness of a district court’s
award of litigation attorney’s fees. Whether that distinction is meaningful
enough to allow a panel of this court to adopt the automatic-entitlement
rule without superseding involvement of the en banc court is a matter we
leave for an appeal where the issue is properly raised and litigated in the
district court.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 11
abuse of discretion in the district court’s refusal to consider
an issue that could reasonably have been raised in Group
Disability’s original motion for appellate attorney’s fees.8
B. Hummell’s Multi-Factor Test
Group Disability asserts the district court’s analysis of the
Hummell factors is infected with legal error and its denial of
appellate attorney’s fees is manifestly unreasonable. In
particular, Group Disability asserts the district court’s refusal
to consider Sun Life’s pre-appeal conduct improperly skewed
its analysis of the Hummell factors in favor of Sun Life. An
award of attorney’s fees is reviewed for abuse of discretion,
though “any elements of legal analysis and statutory
interpretation which figure in the district court’s decision are
reviewable de novo.” Fabbrini v. City of Dunsmuir, 631 F.3d
1299, 1302 (9th Cir. 2011) (quotation omitted). Thus, in
reviewing a district court’s denial of ERISA attorney’s fees,
this court must reverse if the district court used incorrect legal
standards to reach its findings. Hope v. Int’l Bhd. of Elec.
Workers, 785 F.2d 826, 831 (9th Cir. 1986). Furthermore,
this court will reverse a denial of fees if “it has a definite and
firm conviction that the district court committed a clear error
of judgment.” United States v. Tucor Int’l, Inc., 238 F.3d
1171, 1175 (9th Cir. 2001).
The district court erred when it refused to consider the full
course of the litigation, specifically including Sun Life’s pre-
appeal conduct, in applying the Hummell factors to Group
8
It is, therefore, unnecessary to address whether the prevailing-party
presumption set out in United Steelworkers survived the Supreme Court’s
decision in Hardt, 560 U.S. at 244–45.
12 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
Disability’s request for appellate attorney’s fees.9 See Sokol,
812 F.2d at 561 (“First, the district court found that Bernstein
had acted arbitrarily and capriciously and, thus, this appeal
would not have arisen had it not been for his initial bad faith
in handling the pension.”).10 Weighing the five Hummell
9
The district court refused to consider Sun Life’s pre-appeal conduct
in weighing the Hummell factors because Group Disability purportedly did
not raise the issue in its original request for fees. The district court’s
procedural ruling as to waiver of the issue is erroneous. In asserting an
entitlement to appellate attorney’s fees, Group Disability specifically
noted it achieved some success on the merits when it participated in and
supported Micha’s attempt to obtain disability benefits from Sun Life.
Group Disability claimed that but for Sun Life’s bad faith in denying
Micha’s benefits claim, it never would have “became a victim to the
lawsuit.” The only fair reading of Group Disability’s request for appellate
fees is that Group Disability was asking that the district court keep the
basis for Group Disability’s success firmly in mind as it moved though the
Hummell analysis.
10
In its order denying fees, the district court stated that “[w]here an
appellee seeks attorney’s fees and costs for services performed in
connection with defending an appeal, courts in the Ninth Circuit review
whether the appellant pursued the appeal in bad faith and not whether the
appellant’s conduct, which resulted in the original litigation, warrants a
finding of bad faith or culpability.” None of the three cases the district
court cited, however, support that proposition. Two of the cases, DeVoll
v. Burdick Painting, Inc., 35 F.3d 408, 414 (9th Cir. 1994) and Operating
Engineers, 911 F.2d at 1357, involved ERISA beneficiaries, who, unlike
the plans at issue here, are rarely charged attorney’s fees. See Operating
Eng’rs, 911 F.2d at 1357 (noting that “the Hummell considerations very
frequently suggest that attorney’s fees should not be charged against
ERISA plaintiffs”); Flanagan v. Inland Empire Elec. Workers Pension
Plan & Tr., 3 F.3d 1246, 1253 (9th Cir. 1993) (“[O]ur common perception
[is] that attorney’s fees should not be charged against ERISA plaintiffs.”).
And in both DeVoll and Operating Engineers, unlike here, there is no
indication the ERISA beneficiaries acted in bad faith or were culpable at
any point in the litigation, undermining any inference that the opinions’
silence about pre-appeal conduct indicated such consideration was barred.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 13
factors in light of all of Sun Life’s conduct, from its wrongful
denial of Micha’s claim to its filing of a petition for a writ of
certiorari, it is clear Group Disability is entitled to appellate
attorney’s fees.
1. Degree of Culpability or Bad Faith
This factor strongly favors an award of appellate fees and
costs to Group Disability. Group Disability was forced into
this litigation only after Sun Life wrongfully denied disability
benefits to Micha. See supra note 3. Although denominated
as a “defendant” under this court’s then-prevailing Everhart
decision, Micha concluded Group Disability was, in reality,
a co-plaintiff fully supportive of Micha’s request for ERISA
benefits. 597 F. App’x at 907. Sokol requires that courts
weighing the first Hummell factor consider any pre-appeal
bad faith or culpability on the part of the non-claiming party.
In the third case, Misic v. Building Service Employees Health & Welfare
Trust, 789 F.2d 1374, 1379 (9th Cir. 1986), the discussion of appellate
attorney’s fees is so limited, it simply cannot be said the case bears
meaningfully on the issue at hand. It is clear, however, that both parties
in Misic prevailed in significant part, casting doubt on the notion that
either party’s litigation position in the district court amounted to culpable
behavior. Id.
The district court, in denying reconsideration of its denial of fees,
contorted its reliance on those three cases, stating they demonstrated
merely “that courts in the Ninth Circuit may properly consider appeal
conduct under the Hummell factors,” but did not preclude consideration
of pre-appeal conduct, which it said could be, but did not have to be,
considered. Even were the district court’s depiction of Ninth Circuit law
accurate, its order is silent on why it relied on three distinguishable cases
to ignore Sun Life’s bad faith rather than Sokol, which is directly
analogous to this case and, as we hold today, mandates consideration of
any pre-appeal bad faith conduct.
14 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
812 F.2d at 561. This rule prevents a party from insulating
itself from an award of appellate fees by merely identifying
an issue whose resolution is “sufficiently uncertain to have
justified [the party against which an award of litigation fees
has been entered] in seeking appellate review.” Sullivan,
504 F.3d at 672. A party like Sun Life should not be able to
appeal from a litigation fee award, even on an issue justifying
appellate review, and thereby impose significant costs on the
appellee in defending the fee award, while taking comfort in
the knowledge that any potential appellate fee award against
it will be judged solely on the basis of its appellate arguments
on the fee issue. Id.
Furthermore, as this court’s memorandum disposition in
Micha made clear, the underlying fee appeal was a dead-
ender, with no legal significance to anybody but the parties.
597 F. App’x at 906 n.1. Nevertheless, Sun Life vigorously
litigated the matter on appeal, going so far as to dubiously
assert in a petition for certiorari that the memorandum
disposition in Micha would have exceedingly far-reaching
implications for awards under various types of fee-shifting
statutes. The first Hummell factor weighs heavily in favor of
an award of appellate attorney’s fees to Group Disability.
2. Ability to Pay
As noted by the district court, Sun Life does not dispute
its ability to satisfy a fee award. At no point in its analysis,
however, did the district court indicate what weight, if any, it
assigned to this factor. This court’s precedents indicate that,
at least as to a suit involving an ERISA beneficiary as a
plaintiff, a defendant-appellant’s ability to pay should weigh
strongly in favor of an award of fees. See Smith v. CMTA-
IAM Pension Trust, 746 F.2d 587, 590 (9th Cir. 1984).
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 15
Although Group Disability is not technically an ERISA
beneficiary, this Hummell factor still weighs in favor of an
award of fees. In affirming the district court’s original award
of litigation fees in favor of Group Disability, Micha held as
follows:
Having concluded Micha’s ERISA suit
against defendant Sun Life and nominal-
defendant/plaintiff-in-interest Group
Disability is the proper vantage from which to
review the validity of the district court’s fee
award, this court easily rejects Sun Life’s
arguments as to success on the merits. Sun
Life contends that in deciding whether an
attorney’s fee award was appropriate, the
district court was required to focus on the
relief Group Disability obtained on its own
behalf. At each and every point necessary,
Group Disability supported Micha’s request
for disability benefits as consistent with the
insurance contract it purchased from Sun Life.
When, in the course of the underlying
litigation, the district court informed Sun Life
it had serious concerns regarding Sun Life’s
handling of 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.
597 F. App’x at 907. According to Micha, Group Disability’s
interests were identical to, and fully aligned with, Micha’s
interests in obtaining a proper award of disability benefits.
That identity-of-interest did not disappear when Sun Life
appealed the fee award in favor of Group Disability. Sun Life
16 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
has offered no reason to conclude that identity-of-interest
disappeared when analyzing whether the Hummell factors
weigh in favor of an award of appellate fees to Group
Disability. That being the case, the rule of law set out in
Smith weighs in favor of an award of fees in this particular
case.
3. Deterrence
The district court concluded the deterrence factor weighed
against an award of fees because: (1) the original fee award
sufficiently deterred insurance companies from denying
legitimate claims; (2) Sun Life did not act in bad faith in
bringing its appeal because the issue raised was novel; and
(3) the fact the case only arose under the now-rejected
Everhart decision, a situation that would not likely repeat,
meant an award of fees would have no deterrent value. The
district court’s conclusion in this regard is manifestly
unreasonable. First, an award of litigation fees and costs is
not particularly meaningful when a defendant can force the
expenditure of significant fees on appeal to defend that
award. Thus, a proper award of litigation fees that is not
backed up by an award of appellate fees is generally not a
sufficient deterrent to wrongful conduct on the part of an
ERISA defendant. Second, the district court’s consideration
of bad faith is legally suspect because the district court
refused to consider Sun Life’s pre-appeal conduct which, as
discussed above, involved bad faith. See supra note 3.
Finally, the district court’s third consideration (i.e., that the
relative unimportance of the decision in Micha limits the
deterrent effect of any appellate fee award) is arguably
inconsistent with the district court’s determination that Sun
Life’s appellate conduct was taken in good faith because the
issue on appeal was novel. That is, the undeniable fact that
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 17
the district court’s original award of attorney’s fees was
entirely a product of the now-discarded Everhart decision
makes Sun Life’s vigorous appellate advocacy, exemplified
by its petition for certiorari, all the harder to understand and
all the more susceptible to the deterrent effect of an award of
appellate fees. The district court abused its discretion in
concluding this factor weighed against an award of fees.
Instead, an award of appellate fees in the circumstances
present in this appeal would have a significant deterrent effect
as to the bringing of marginal appeals after a misconduct-
based denial of ERISA benefits, see supra note 3, led to an
award of litigation fees and costs.
4. Significance of Legal Issue/Benefit to All Plan
Participants
Micha held that the resolution of Sun Life’s appeal had no
practical significance to anybody but the parties on appeal.
597 F. App’x at 906 n.1. Because Sun Life vigorously
pursued an appeal with limited practical significance all the
way through a petition for a writ of certiorari, this factor
weighs in favor of an award of fees to Group Disability.11
11
In concluding this factor did not weigh in favor of an award of fees,
the district court stated as follows: “Group Disability admits that this
factor does not weigh in favor of an award of fees. Instead, Group
Disability argues that this factor is largely inapplicable in an individual
dispute and should therefore be deemed inapplicable here.” The district
court’s decision is based upon a misreading of the record. In its request
for fees, Group Disability specifically argued that because the litigation
fee award was well grounded in law and equity, Sun Life’s appeal from
that award did not present a significant legal issue. It is certainly true that
in its reply in support of an award of fees, Group Disability conceded that
the other portion of this factor, benefit to others, was irrelevant. Notably,
however, there is nothing in Group Disability’s reply withdrawing its
previous argument that because Sun Life’s appeal did not present a
18 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
5. Relative Merits of the Parties’ Positions
Given that Group Disability prevailed on every matter at
issue in Micha, the district court correctly concluded this
factor favored an award of fees because Group Disability
prevailed on appeal.
Properly viewed, each of the Hummell factors weighs in
favor of an appellate fee award to Group Disability. The
district court’s contrary conclusion and denial of an award of
appellate attorney’s fees amounts to an abuse of discretion.
IV. CONCLUSION
For those reasons set out above, the district court’s denial
of Group Disability’s motion for appellate attorney’s fees and
costs is REVERSED and the matter is REMANDED to the
district court for the calculation of a reasonable award of fees
and costs.
significant legal issue, this factor still favored an award of fees. Thus, the
district court erred in concluding Group Disability conceded the
inapplicability of this entire factor, instead of conceding the inapplicability
of the benefit-to-other-participants portion of the fourth Hummell factor.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 19
BERZON, Circuit Judge, concurring:
I concur in the opinion with the following observations:
Were we reaching the issue,1 I would hold that both
Supreme Court precedent and our own case law compel the
conclusion that ERISA § 502(g)(1) fees should be awarded
on appeal to a party that successfully defends the fees it was
awarded at the district court. Put another way, “fees-on-fees”
should be nigh unto automatic, in ERISA cases as in others.
We should not troop through the Hummell factors, see
Hummell v. S. E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir.
1980), with regard to the fees appeal—even though, as the
opinion in this case illustrates, the result of doing so properly
is likely another fee award.
The case law on fee-shifting statutes is well-settled. See,
e.g., Comm’r, I.N.S. v. Jean, 496 U.S. 154, 161–63 (1990);
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 408–09
(1990). “[C]ourts have uniformly held that time spent
establishing the entitlement to and amount of the fee is
compensable under federal fee-shifting provisions . . . .”
Blixseth v. Yellowstone Mountain Club, LLC, 854 F.3d 626,
629 (9th Cir. 2017). We have applied this principle in
1
As the main opinion notes, Group Disability affirmatively invited
use of the Hummell factors in analyzing fees for the fees appeal, arguing
exclusively on that basis to the district court. See Op. at 7–9. Only on
appeal did Group Disability assert that appellate fees are nearly always
available for the successful defense of a fee award. We have discretion to
“consider an issue raised for the first time on appeal if the issue presented
is purely one of law and the opposing party will suffer no prejudice as a
result.” United States v. Valdez-Novoa, 780 F.3d 906, 914 (9th Cir. 2015)
(internal quotation marks omitted). The majority has opted not to exercise
that discretion here. See Op. at 9. I accede to that decision.
20 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
numerous contexts. See, e.g., id. (fees under 28 U.S.C.
§ 1927); In re S. Cal. Sunbelt Developers, Inc., 608 F.3d 456,
462 (9th Cir. 2010) (fees following dismissal of an
involuntary bankruptcy petition); Camacho v. Bridgeport
Fin., Inc., 523 F.3d 973, 978, 981 (9th Cir. 2008) (fees under
the Fair Debt Collection Practices Act); see also Kinney v.
Int’l Bhd. of Elec. Workers, 939 F.2d 690, 693 (9th Cir. 1991)
(common-law fee-shifting).
The underlying logic is that unless securing a fee
entitlement on appeal is cost-free to the party awarded fees on
the merits, the initial fee award will be effectively reduced or
eliminated, fundamentally undermining the purposes of the
fee-shifting provision. See Bandak v. Eli Lilly & Co. Ret.
Plan, 587 F.3d 798, 803 (7th Cir. 2009); Camacho, 523 F.3d
at 981. These purposes include creating an incentive for
attorneys to provide representation in cases where counsel
might otherwise be difficult to obtain, or where it is
particularly important that the represented party obtain the
full monetary amount due, without having to expend an
additional sum to secure it. See, e.g., Jean, 496 U.S. at 164
(“If the Government could impose the cost of fee litigation on
prevailing parties . . . , the financial deterrent that the EAJA
aims to eliminate would be resurrected.”); Ne. Ohio Coal. for
the Homeless v. Husted, 831 F.3d 686, 724–25 (6th Cir. 2016)
(“[D]iluting the overall fee award by failing to provide fully
compensatory fees for fees undermines the congressional
intent behind [§ 1988], which is to encourage the private
prosecution of civil rights suits through the transfer of the
costs of litigation to those who infringe upon basic civil
rights.” (internal quotation marks omitted)). In such cases, if
fee-shifting is to mean anything, it must mean that the
prevailing party actually obtains the benefit of its fee award,
rather than depleting or exhausting it in the inevitable follow-
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 21
on litigation. Moreover, if the party prevailing as to fees will
not get its full fees for defending the award, the opposing
party has leverage to force a discount to the fee award in
settlement, without pursuing an appeal and expending its own
attorneys’ fees to do so. Husted, 831 F.3d at 724.
There is no doubt that the ERISA fees provision at issue
here, 29 U.S.C. § 1132(g)(1), is a fee-shifting provision of the
sort covered by these precedents. The ERISA fees provision
contemplates that a court may award reasonable fees and
costs “[i]n any action . . . by a participant, beneficiary, or
fiduciary.” Id. (emphasis added). A plain reading of this
language makes clear that Congress intended the fee-shifting
provision to apply to the “action” as a whole, rather than to
discrete aspects of it. Nor does anything in the statute suggest
that the fee award qualifies as damages or operates as a
sanction; where the fees are part of a damages or sanction
award, the party who wins the fee award is not entitled to fees
incurred in defending it on appeal. Sunbelt, 608 F.3d at 464
(“The distinction . . . is between those statutes which permit
recovery of attorney’s fees as damages, and which are
therefore consistent with the American Rule, and those which
permit the recovery of attorney’s fees qua attorney’s fees and
therefore create an exception to the American Rule.”
(citations and internal quotation marks omitted)); Blixseth,
854 F.3d at 629 (“[T]he Supreme Court [has] distinguished
fee-shifting provisions, where eligibility turns on the merits
or outcome of the litigation and costs are shifted for the
litigation as a whole, from sanctions statutes like the former
version of Rule 11, where eligibility turned on whether a
specific pleading was well-founded and costs are shifted only
for a discrete portion of the litigation.”).
22 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
Moreover, the Supreme Court has referred to § 1132(g)(1)
as a “fee-shifting” provision and as a “statutory deviation[]
from the American Rule.” Hardt v. Reliance Standard Life
Ins. Co., 560 U.S. 242, 253–54 (2010). And the standard for
ERISA fees under Hardt focuses on the action as a whole, not
on success on any individual component of the action. “A
claimant does not satisfy th[e] requirement [of achieving
some success on the merits] by achieving trivial success . . .
or a purely procedural victory, but does satisfy it if the court
can fairly call the outcome of the litigation some success on
the merits without conducting a lengthy inquiry into the
question whether a particular party’s success was substantial
or occurred on a central issue.” Id. at 255 (emphasis added)
(alterations and internal quotation marks omitted).2
The opinion in this case gets halfway to an “automatic
entitlement rule” by concluding that the district court was
required to consider the entire litigation under its second
Hummell analysis. As long as the second Hummell analysis3
2
Baker Botts L.L.P. v. ASARCO, LLC, 135 S. Ct. 2158, 2164–66
(2015), does not support a contrary conclusion. Baker Botts held that the
statute at issue in that case—§ 330(a)(1) of the Bankruptcy Code—was
not a fee-shifting statute that displaced the ordinary American Rule. Id.
Section 330 authorizes a court to award “reasonable compensation for
actual, necessary services rendered,” 11 U.S.C. § 330(a)(1)(A), a phrase
the Supreme Court held “neither specifically nor explicitly authorizes
courts to shift the costs of adversarial litigation from one side to the
other.” Baker Botts, 135 S. Ct. at 2165. Consequently, the Court held,
there was no basis to conclude that fees-on-fees were allowed under § 330.
Here, by contrast, there is no question that the provision at issue is a fee-
shifting provision, for which fees incurred on appeal are allowed.
3
Or the third Hummell analysis. Or the fourth. Among the problems
with repeating the Hummell analysis with every fee request is that it forces
parties back to court to adjudicate fees from prior litigation adjudicating
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 23
accounts for everything that preceded it, a party’s fee
entitlement isn’t likely to change from one stage of litigation
to the next. The reasons for upholding fees from the district
court will apply equally to granting them for the appeal. The
result is, in effect, something close to the ordinary fees-on-
fees approach this court has applied in other fee-shifting
contexts.
But if the effect is largely the same, refusing to adopt the
ordinary approach is all the more difficult to justify. As
noted, the ERISA fees provision, 29 U.S.C. § 1132(g)(1), is
not meaningfully different from any other fee-shifting
provision controlled by Jean. See Bandak, 587 F.3d at
802–03. Of course, we do require a Hummell analysis before
ERISA fees will be awarded. Simonia v. Glendale
Nissan/Infiniti Disability Plan, 608 F.3d 1118, 1119 (9th Cir.
2010). But nothing in Simonia requires that the Hummell
analysis be performed more than once, or separately at the
fees-on-fees stage.
The amount of a fee award may be determined separately
at the fees-on-fees stage, with the filing of a new fee
application. See Jean, 496 U.S. at 163 (“[N]o award of fees
is ‘automatic.’ . . . Exorbitant, unfounded, or procedurally
defective fee applications—like any other improper position
that may unreasonably protract proceedings—are matters that
the district court can recognize and discount.”). But as Jean
also stresses, the entitlement to fees-on-fees and the amount
of such fees are distinct questions. Id. at 161–63; see also
fees. The Supreme Court has disapproved of this sort of “Kafkaesque
judicial nightmare of infinite litigation to recover fees for the last round of
litigation over fees.” Jean, 496 U.S. at 163 (internal quotation marks
omitted).
24 SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN
Atkins v. Apfel, 154 F.3d 986, 989 (9th Cir. 1998). Under a
fee-shifting statute, the threshold entitlement question is
answered only once.
As the opinion notes, this court has previously conducted
a separate Hummell analysis for fees awarded on an ERISA
merits appeal. Operating Eng’rs Pension Trusts v. B & E
Backhoe, Inc., 911 F.2d 1347, 1356 (9th Cir. 1990); see also
Op. at 9–10 n.7.4 We could, however, limit Operating
Engineers to its procedural posture, and distinguish it from
fees-on-fees disputes such as Micha’s, where the logic
underpinning the automatic entitlement rule is particularly
compelling.5 See Voice v. Stormans Inc., 757 F.3d 1015,
1016 (9th Cir. 2014).
4
I am less confident than the majority that Credit Managers can be
described as a merits appeal. See Credit Managers Ass’n of S. Cal. v.
Kennesaw Life & Acc. Ins. Co., 25 F.3d 743, 746 (9th Cir. 1994). But
even as a fees-on-fees case, Credit Managers does not preclude an
automatic entitlement here. Credit Managers assumed Hummell
governed, without considering any possible fees-on-fees distinction. Id.
at 752. It is therefore nonprecedential on that point. See Sorenson v.
Mink, 239 F.3d 1140, 1149 (9th Cir. 2001) (“[U]nstated assumptions on
non-litigated issues are not precedential holdings binding future
decisions.” (citation omitted)); Estate of Magnin v. C.I.R., 184 F.3d 1074,
1077 (9th Cir. 1999) (“When a case assumes a point without discussion,
the case does not bind future panels.”).
5
Because Jean requires a single fee entitlement decision under fee-
shifting statutes such as this, the approach taken in Operating
Engineers—a separate entitlement analysis for defending a merits victory
on appeal—is almost certainly wrong. But as the present case concerns
only fees for a fees appeal, Operating Engineers has no direct application.
Moreover, like Credit Managers, Operating Engineers assumes, without
explanation, that Hummell applies a second time to appellate fees, and so
likely does not bind future panels. Operating Engineers, 911 F.2d at
1356–57; Estate of Magnin, 184 F.3d at 1077.
SUN LIFE ASSURANCE V. GRP. DISABILITY BENEFITS PLAN 25
In sum, had the automatic entitlement issue been raised at
the district court, I would have taken this opportunity to make
clear that parties who seek fees on a successful ERISA fees
appeal are not required to prove their entitlement to fees a
second time. As the issue was not raised in the district court,
and as the majority has opted not to exercise its discretion to
decide a new issue raised for the first time on appeal, I concur
in the opinion.