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11th Circuit Reverses Award of Court Costs to LTD Plan Administrator

11th Circuit Court of Appeals in Atlanta

11th Circuit Court of Appeals in Atlanta

The Eleventh Circuit Court of Appeals reversed a District Court’s award of court costs to the administrator of a group long term disability.  In Emery v. American Airlines, Inc., Kathy Emery, a former pilot for American Airlines, had filed a lawsuit for LTD benefits against American, along with claims for other types of damages.  One of those other claims was a claim for penalties against American for its failure to produce copies of plan documents as required by federal statute.

American was the Defendant, because it did not have an insurance company running its long term disability benefit plan.  It was the disability plan administrator.  Under ERISA, a plan administrator must produce copies  of plan documents within 30 days of receiving a written request.  The ERISA plan administrator may face a penalty of up to $110 per day for each day after the 30th day if it fails to send the documents to the employee.  In this case, American did not send the documents for some time, and ultimately was hit with a civil penalty of $14,080 “[i]n light of the disturbing failure of Defendant to respond timely to Emery’s request” for Plan documents to which she was entitled under ERISA.”

Unfortunately, Ms. Emery lost her claim for long term disability benefits, and two of the other claims.  At the end of her case, the District Judge awarded court costs (not attorney fees) to American Airlines as the “prevailing party” in the case.  Ms. Emery appealed.  Though she lost all of the other grounds on which she appealed, she was able to get the Eleventh Circuit Court to reverse the award of court costs to American.  In doing so, the Court explained:

A defendant is a prevailing party if the plaintiff achieves none of the benefits it sought in pursuing the lawsuit. See [Head v. Medford, 62 F.3d 351, 354 (11th Cir. 1995)] (concluding that a defendant was the prevailing party when the district court granted its motion for summary judgment and dismissed the plaintiff’s remaining state law claims); see also 10 Moore’s Federal Practice § 54.171[3][c][iv], at 54–285 (“If the case is litigated to judgment on the merits in favor of the defendant, the defendant is the prevailing party.”). Here, however, Emery prevailed on one of her claims against American. Put differently, although American avoided liability on three of the claims Emery pursued against the company, it was held liable to Emery for a civil penalty on her fourth claim. Under these facts, the district court erred in deeming American to be the prevailing party in the litigation.  SeeLipscher [v. LRP Publ’ns, Inc.], 266 F.3d 1305, 1321 (11th Cir.2001)Accordingly, we reverse the district court’s award of costs in favor of American.
So, even though Ms. Emery lost on 3 out of 4 claims, she was still the prevailing party on one of them and court costs should not have been assessed against her.

Emery v. American Airlines, Inc., — Fed.Appx. —, 2016 WL 1425939 (11th Cir. 4/12/2016).

 

If you would like to discuss your Long Term Disability claim with Disability Attorney John Tucker, please call (866) 282-5260.

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