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Templin v. Independence Blue Cross

United States Court of Appeals for the Third Circuit

October 21, 2014, Argued; May 8, 2015, Opinion Filed

No. 13-4493

Opinion

 [*863]  OPINION OF THE COURT

NYGAARD, Circuit Judge.

] A party seeking attorney's fees under ERISA must show "some success" on the merits. Here, the District Court incorrectly defined "some success" by requiring evidence of judicial action. We will reverse.

The Appellants, two individuals and two pharmacies, originally brought a denial of benefits action under the Employees Retirement Income [**2]  Security Act (ERISA) and two state law causes of action. The Appellees are insurance companies. The underlying claims in this dispute concerned the Appellees' alleged refusal to honor Appellants' claims for payment of blood-clotting-factor products. The original complaint was filed in 2009. The insurance companies moved to dismiss, arguing that the Appellants failed to exhaust their administrative remedies.

The District Court denied the motion to dismiss and ordered the Appellees to review the Appellants' claims for benefits. The Appellees then paid the claims in full and the District Court dismissed the complaint as a result of the Appellees' payments. Following dismissal, both the Appellants and the Appellees filed for attorney's fees and costs, which the District Court denied. The parties appealed and we affirmed the District Court's decision to deny fees. Templin v. Independence Blue Cross, 487 Fed. Appx. 6 (3d Cir. 2012). We remanded, however, on one issue: whether the Appellants were entitled to interest on the delayed payment of benefits. Id.

On remand, Appellants sought interest ranging from approximately $1.5 to $1.8 million. While most of this interest was sought under the Maryland Code, Appellants also demanded approximately $68,000 based [**3]  on the federal Treasury bill rate. The District Court convened a hearing in January of 2013 at which it made comments suggesting that, in its view, interest at the federal rate was likely appropriate, but that interest under the Maryland statute would be improper. Based on these parameters, the District Court encouraged the parties to reach a settlement. Unable  [*864]  to do so, the Appellants filed their Third Amended Complaint. At a pre-trial hearing in March of 2013, the Appellees agreed to pay $68,000.00 in interest to the Appellants. As a result of this settlement, the District Court dismissed the case. After the matter had been dismissed, the Appellants filed a motion for attorney's fees and costs. They sought $349,385.15 for work performed from November 1, 2010 until August 4, 2013. The District Court denied the motion.

The District Court believed that the Appellants had failed to achieve "some degree of success on the merits." Hardt v. Reliance Standard Life Ins., 560 U.S. 242, 255, 130 S. Ct. 2149, 176 L. Ed. 2d 998 (2010) (citation omitted). The Court noted that it had never made a substantive determination on the question of whether Appellants were entitled to receive interest under the ERISA statute, and that the issue "was settled among the parties outside the courtroom and [**4]  without a judgment from the Court." J.A. at 15. It also thought that the Appellants failed to achieve success on the merits because the amount of interest they actually received—$68,000.00—was "trivial" when compared to the millions of dollars they originally sought. Id. at 18.

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785 F.3d 861 *; 2015 U.S. App. LEXIS 7624 **; 60 Employee Benefits Cas. (BNA) 1128

CHRISTOPHER TEMPLIN; VIOLA HENDRICKS; FELDMANS MEDICAL CENTER PHARMACY, INC.; FCS PHARMACY LLC, Appellant v. INDEPENDENCE BLUE CROSS; QCC INSURANCE COMPANY; CAREFIRST, INC.

Prior History:  [**1] On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. No. 5-09-cv-04092). District Judge: Honorable Joel H. Slomsky.

Templin v. Independence Blue Cross, 2013 U.S. Dist. LEXIS 162790 (E.D. Pa., Nov. 14, 2013)

CORE TERMS

district court, attorney's fees, merits, culpable, catalyst, prevailing party, award of attorney's fees, eligible, factors, costs, degree of success, settlement, parties, theory of recovery, trivial, victory

Pensions & Benefits Law, Damages, Costs & Attorney Fees, General Overview, Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Remedies, De Novo Review, Questions of Fact & Law, Discretionary Fees, Attorney Fees & Expenses, Basis of Recovery, American Rule, Statutory Awards, Catalyst Theory, Basis of Recovery