PAKOVICH v. VERIZON LTD PLAN (July 22, 2011)
Lisa Pakovich became disabled during her employment with Verizon. Verizon denied her request for long-term disability benefits under its ERISA plan. Although the district court affirmed the denial, the Seventh Circuit reversed and remanded to the plan administrator for a new determination. Pakovich heard nothing from the administrator for almost 5 months so she filed another suit. Shortly thereafter, the Plan agreed to pay all the benefits she requested and moved to dismiss her suit as moot. Judge Reagan (S.D. Ill.) denied the motion, entered judgment for Pakovich in the amount the Plan agreed to pay, but denied Pakovich's fee motion.
In their opinion, Seventh Circuit Judges Flaum, Evans, and Tinder vacated in part and affirmed in part. The Court first agreed with the Plan that Pakovich's case was moot. The Plan agreed to pay everything she asked for in her claim for benefits. Her fee request did not prevent her case from being moot. The Court next considered whether the district court even had jurisdiction of her fee claim. Relying on its FOIA jurisprudence, the Court concluded that a district court retains equitable jurisdiction to address a fee claim. Addressing the merits of the fee claim, the Court noted that a fee award under ERISA has two elements. First, the claimant must show "some degree of success on the merits." Second, the defendant's position must be not substantially justified. The Court ultimately determined that it did not need to decide either of those elements. Here, the district court denied her fee request because of inadequate documentation and support for either the hourly rate or the time spent. It was her burden to adequately support her request. The district court did not abuse its discretion when it denied fees.