Judge: Drop an ERISA Claim and Pay Lawyer Fees

November 14, 2002 (PLANSPONSOR.com) - A worker who sues his employer for an ERISA violation has to pay the company's lawyer fees in defending itself if the lawsuit is eventually dropped, a federal judge ruled.

US District Judge Sue Robinson of the US District Court for the District of Delaware issued the ruling in a suit by plaintiff John McNaboe against his former employer NVF Co., which included an ERISA claim relating to NVF’s deferred retirement income security plan, Washington legal publisher BNA reported.

“Given plaintiff”s continual changing of theories and positions throughout the litigation regarding his ERISA claim, and the ultimate withdrawal of this claim altogether, the court concludes that plaintiff’s conduct, while perhaps not rising to the level of bad faith, is certainly culpable,” Robinson wrote.

During a jury trial, McNaboe voluntarily withdrew his ERISA claim. Following the trial, NVF asked Robinson to award attorneys’ fees it incurred in defending against the ERISA claim.

Robinson ruled that McNaboe’s real reason for including the ERISA claim in his suit was to make sure he could pursue his disagreement with NVF in federal court and not be sent back to a state court.

“Based on plaintiff’s pleadings and positions throughout this litigation, the court concludes that plaintiff’s ERISA claim was not aimed at protecting his pension benefits, but rather to ensure federal jurisdiction over what essentially amounted to a breach of contract claim,” Robinson wrote. “Awarding reasonable attorneys’ fees would act as a deterrent against parties bringing meritless ERISA claims for purposes of obtaining federal jurisdiction.”