Individuals who have been denied LTD benefits often ask their disability lawyer whether they can obtain any punitive damages or penalties against the plan or insurance company for failing to follow the law. Unfortunately, under the law that covers most of these plans (the Employee Retirement Income Security Act of 1974 “ERISA”), these damages are not available. Given the state of the law, there are very little consequences when a disability plan acts illegally. The payment of the benefits owed is practically the only remedy available to plaintiffs. However, even though there are no punitive damages, the Court may force the insurance company and/or LTD plan to pay the plaintiff’s attorney’s fees. In these instances, the imposition of attorney’s fees acts as the only penalty or punitive action that can work to deter LTD plans from violating the law. In a recent case, Ramos Law was successful in obtaining an award of attorney’s fees against the Federal Express Long Term Disability Plan. See Dwinnell v. Fed. Express Long Term Disability Plan, 2017 U.S. Dist. LEXIS 57828 (D. Conn. Apr. 14, 2017) .
In Dwinnell, the plaintiff brought a case against the benefits plan of her former employer, Federal Express Corporation, and its disability plan administrator, Aetna Life Insurance Company, after she was denied long term disability benefits. Following several years in litigation, the Court found that Aetna acted contrary to the law by failing to conduct a vocational review of the plaintiff’s claim.
In District Courts within the Second Circuit, disability plan administrators are required to conduct a two-step evaluation of disability claims. First, the plan must conduct a medical review. Once this first level of review is completed, the plan must conduct a second assessment which involves a vocational evaluation of the claim. In Dwinnell, Aetna did not conduct a vocational review and decided the case solely based on the medical evidence. In light of the incomplete review of the claim, District Judge Jeffrey A. Meyer ruled that Aetna’s review process failed to satisfy the standard set forth by the Second Circuit Court of Appeals. The case was remanded back to Aetna with an order to conduct a new review which must include a vocational assessment of the plaintiff’s claim.
After successfully arguing her position, the plaintiff in Dwinnell then filed a motion for attorney’s fees and costs. Judge Meyer granted the motion and found that Attorney Ivan Ramos’ fees of $375 per hour and Paralegal Jessica Smith’s rate of $100 per hour were reasonable. Based on the amount of time spent by Ramos Law working on this case, Judge Meyer ordered FedEx to pay Ramos Law $40,657.75 in Attorney’s fees and $400 in costs.
It must be noted that under ERISA, a plaintiff need not have total success on the merits of his or her case in order to obtain attorney’s fees. In fact, the law states: “The court in its discretion may allow a reasonable attorney’s fee and costs of action to either party,” appropriate if the party seeking fees has had “some degree of success on the merits.” Therefore, attorney’s fees can be awarded when the plaintiff gets a second opportunity to have the cases reviewed but does not get his or her benefits reinstated.