# Petition for Writ of Certiorari — Geissal v. Moore Medical Corp.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_0821%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2004
- **Citation:** 540 U.S. 1181

## Text

Supreme Court, U.S.
|, FILED

03-874 DEC 11 2003,

e
Supreme Court of the United States

Bonnie L. Geissal, as personal representative
of the Estate of James W. Geissal,

Petitioner,

Vv.

Moore Medical Corporation; Group Benefit Plan, of Moore
Medical Corp.; Hebert Walker

Respondents.

On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Eighth Circuit

PETITION FOR A WRIT OF CERTIORARI

Sheldon Weinhaus
Counsel of Record
906 Olive Street
Suite 900
St. Louis, MO 63101-1463
(314) 621-8363
Attorney for Petitioner
ROT TEPER AAR TE EET STRAIN A HT EEE

CURRY & TAYLOR @ WASH D.C. @ (202) 223-3160 @ USSCINFO.COM

Il.

III.

i
QUESTIONS PRESENTED

When an ERISA plan administrator’s COBRA
violation forces innocent health care providers
and secondary carriers to pay for a participant’s
health care benefits, is the plan participant
entitled to recover such benefits as legal
restitution and hold it in constructive trust for
the benefit of these third parties?

Can an ERISA health care plan administrator
take advantage of later payments made by
another COB insurer to avoid paying benefits,
where the other insurer would not have paid but
for the administrator’s COBRA violation and the
express terms of the primary insurer's plan
prohibits taking credits for such other COB
insurer's payments?

Should a lower court refuse to entertain ERISA
502(c) penalties against a clear "disparagement"
of the plain meaning of the COBRA statute and
attempt to create "draconian alternatives" to
Congressional intent, on the basis that the plan
administrator’s refusal to comply with the
COBRA statute is "reasonably justifiable."

il
PARTIES TO THE PROCEEDINGS

Petition here, and plaintiff and appellant in the
courts below, is Bonnie L. Geissal, personal
representative of the Estate of James W. Geissal,
deceased.

Respondents herein and defendants and
appellees in the courts below, and are

Moore Medical Corp.
Group Benefit Plan of Moore Medical Corp., and
Herbert Walker

The Respondents were also cross appellants in
the Court of Appeals.

ill

TABLE OF CONTENTS
pages
QUESTIONS PRESENTED. .........sccscossscssossesecsesesessssseescoecesoeees i
PARTIES TO THE PROCEEDINGS. .......ecccccssssesecececeosesececesese, ii
Tm PI a ssnccssccosensciensseonscnsescsnvacvnososseces iv
EEE a a ee 1
SEEN IEE eo ee 1
MEMES VRINE FROVIBIOND .oscnsccecssscesesecesesesssevscosensevessecacsossoss 2
race oliands citeidcl ys aidedsudksstdsasnerecsaiusccdsoase, 6
REASONS FOR GRANTING THE WRIT ...ceccsecccsocecececcececeses 1 0
i sspsuuseninnisiccs 12
SURE ts ea ern 21
APPENDIX
COURT OF APPEALS DECISION .....cscscceseccssesessscssesececes. la
DISTRICT COURT MEMORANDUM ....cecscecceseseseceosesecese 18a
DISTRICT COURT DECISION .........cccccccecessssesesesecesescees 54a
COURT OF APPEALS ORDER DENYING
EET EEE eC 72a
COURT OF APPEALS ORDER ........ccccscecececesscsssesseceseoeee 73a

iv
TABLE OF AUTHORITIES

Cases

ADMINISTRATIVE COMMITTEE OF THE
WAL-MART STORES, INC. V. VARCO,
2003 U.S. App. LEXIS 17772 (7™ Cir.

UNPUBLISHED 2008) ..cscsccsosssscosessoscesosessosessoess

ALLIS-CHALMERS CORP. V. LUECK, 471

SNe (RI Pere. conicteisninansivinaliistntibvinesctinatoidiinebinetions

ARANA V. OCHSNER HEALTH PLAN, 338

Fe COTE CUR, Bt) vistensecasccseresessstnonnsimnnes

BOONE V. LEAVENWORTH ANESTHESIA,

INC., 20 F.8D 1108 (LOTH CIR. 1994)............. ome

COMMUNITY HEALTH PLAN OF OHIO V.

MUSSER, 347 F.3D 619 (6TH CIR. 2008)............

DAUGHTREY V. HONEYWELL, INC., 3 F.3D

Re ee re ee IE saiisiestasdsstaitcaeeceearcerrsaeatnaines

FARMER V. PERSONNEL POOL OF PLATT

COUNTY, 110 S.W.3D 818 (MO. 2008)..............4.

FIRESTONE TIRE & RUBBER CoO. V.

BRUCH, 489 U.S. 101, 112-113 (1989)...

FOSSO V. STATE FARM MUT. AUT. INS. Co.,

940 F.2D 388 (8TH CIR. 1991)........c.cecccccccccccccceee

FRANCONIA ASSOCIATES V. UNITED

STATES, 536 U.S.129, 142-143 (2002)............004

pages _

3 Fs ee

V

FRANKLIN V. GWINNETT CO. PUBLIC
SCHOOLS, 503 U.S. OD, FO CII ance sictsesctnisssesicaseceeee 20

GEISSAL V. MOORE MEDICAL Corp. , 024
SE DD, FRUIT scstsnssieoriannnpviseninsinniinicase sada: 1,7, 10, 12,19

GREAT-WEST LIFE ASSURANCE CORP. V.
KNUDSON, 524 U.S. 204 | 10, 11, 13, 14

KING V. JOHN HANCOCK MUTUAL LIFE
INS. CO., 500 N.W.2D 619 (S.D. 1998) .eecccccsccccsccssseccccosse 7

LUTHERAN HOSPITAL OF INDIANA, INC. Vv.
SAINT JOSEPH MEDICAL CENTER, 51
F.3D 1808 (7TH CIR. 1995) ....ssscsscssssssecsssssssssseccosseccsseccs... 7

LUTHERAN MED. CTR. v. CONTRACTORS
HEALTH & WELFARE PLAN, 25 F.3D 616,
SED ORE CEM, TIES ccvesscnvensncssossiisotnsenmuiunacascns cc, 15

MATHIAS V. ACCOR ECONOMY LODGING,
INC., 347 F.3D 672 (7TH CIR. Ee nee 20

MERTENS V. HEWITT & ASSOCIATES, 508
AED SO NO cciinniaiekceuannude ie eaten 11,14

MOOTHART V. BELL, 21 F3D 1499 (10TH
AR, FO sisiscsscscncnscaviebaiseasemanee aan 19

OAKLEY V. CITY OF LONGMONT, 890 F.2p
LEZS (LOTH CIR. 19BD) q...vcsssesececssovesseserseseouceaseeteresonssisec2, 7

REICH V. CONTINENTAL CASUALTY Co., 33
F.3D 754 (7TH CIR. 1994) ooo cecccccccoscecoccoseeeesn, 10, 13, 14, 18

vil
SAMSEL V. ALLSTATE INS. Co., 59 P.8D 281
EIT TTI TD cieriitensnscnnnncsnieseseicsiacetinsinsininenaannatien 18

SCOTT V. SUNCOAST BEVERAGE SALES,
LTD., 295 F.3D 1233 (11TH CIR. 2002).........scscossescesseees 19

VENEZIANO V. LONG ISLAND PIPE
FABRICATION & SUPPLY, 2003 U.S. APP.

LEXIS 21755 GRD CER, BOUD) nrsccscosoeressssasencscosonsenssunness 19
WINSTEAD V. J.C. PENNY CoO., 933 F.2D

BHR, BIS SD CTI CAR, TIG1) vcivanrocescseasenpnanscosnnnsoneees 11,15
Statutes
Be RET. F GG sv cscenserseinnsnnrssviseniasseosnsonsesnsnnenaspeneisacemubnnnaans 1
BAe EI TIA. BAI ascescesineesnteninniesecsivenbesenineininnsannicianaimmnmesaiins 2
METALS. FYE sesscsasnescreensnivrsi descr peentevioncesentiot 2
BA TAI, © BBE secssinecveccensosntnssnssitntewneeesoneliatanmianatesunainntnnas 1
BP RITES. © BBGE .ncccsssnssnicinsrssnsnonsssssacennntooenainaanneensonnenentonts 2
Bee ate F EID cevviscenenvnnicsapnictenstpniantoiansenonneicinns 1,11, 12
BP Sas, & ASIA vccntenisdsnecnivnpsncimciepsnsstisninunncennnmamenmntes 1,5
STU EEG... § PEGE A) cssnscssorpevsencissnviotsniincnnensninaccmenipmeinios 6
29 U.S.C. § ik... ings 4

a

Vii
THER AUTHORITIES

poengermme Catan Fevibe BB oaesinccccsccsesesesssscscnssossessorecacesecsoess 2

1
OPINIONS BELOW

The opinion of the United States Court of Appeals
for the Eight Circuit rendered July 31, 2003, is reported
at 338 F.3d 926, and is reprinted in the appendix hereto as
la through 17a. A petition for rehearing or rehearing en
banc was denied September 12, 2008, and is not officially
reported; it is printed in the appendix as 72a. A later
grant of fees and costs to Plaintiff by the Eighth Circuit
on Plaintiff's appeal and for Plaintiffs success in opposing
Defendants’ cross-appeal on fees is also unreported and
appears in the appendix as 78a.

Of the two opinions of the United States District
Court for the Eastern District of Missouri from which
Plaintiff appealed, the first is reported at 158 F.Supp.2d
976, and is reprinted in the appendix as 18a to 53a. The
second decision of the District Court, issued one year

later, is unreported, and appears in the appendix as 54a to
71a.

JURISDICTION

This case was earlier before this Court. Geissal v.
Moore Medical Corp., 524 U.S. 74 (1998).

The district court had jurisdiction of this action
pursuant to 28 U.S.C. §1331 and 29 U.S.C. §§1132(a) and
1161. Upon remand by this Court, the magistrate judge
continuing to act under the original consent given
pursuant to 28 U:S.C. §636(c)(1) denied any remedy for
Petitioner save for attorneys fees and costs, and issued
final judgment on March 29, 2002.

SO
RL A NE ET aT a TT TE

Petitioner appealed to the Eighth Circuit Court of
Appeals pursuant to 28 U.S.C. §1291. The judgment of
the Court of Appeals was entered July 31, 2003.
Petitioner filed a petition for rehearing by the panel or,
alternatively, for rehearing en banc. The Court of
Appeals denied the petition September 12, 2003.

Pursuant to Supreme Court Rule 13.1, this petition
has been filed within 90 days of the denial of rehearing.
The jurisdiction of this Court is invoked pursuant to 28
U.S.C. §1254.

RELEVANT PROVISIONS
ERISA

ERISA $8502, 29 U.S.C. §1132, in pertinent part
provides:

See. 1132 - Civil enforcement

(a) Persons empowered to bring a civil
action

A civil action may be brought -
(1) by a participant or beneficiary

(A) for the relief provided for in
subsection ©) of this section, or

(B) to recover benefits due to him under
the terms of his plan, to enforce his rights
under the terms of the plan, or to clarify
his rights to future benefits under the

terms of the plan;

(2) by the Secretary, or by a participant,
beneficiary or fiduciary for appropriate
relief under section 1109 of this title;

(3) by a participant, beneficiary, or
fiduciary (A) to enjoin any act or practice
which violates any provision of this
subchapter or the terms of the plan, or (B)
to obtain other appropriate equitable
relief (i) to redress such violations or (ii)
to enforce any provisions of this
subchapter or the terms of the plan;

a * *

©) Administrator's refusal to supply
requested information; penalty for failure
to provide annual report in complete form

(1) Any administrator (A) who fails to
meet the requirements of paragraph (1)
or (4) of section 1166 [2] of this title or
section 1021(e)(1) of this title with respect
to a participant or beneficiary, or (B) who
fails or refuses to comply with a request
for any information which such
administrator is required by this
subchapter to furnish to a participant or
beneficiary (unless such failure or refusal
results from matters reasonably beyond
the control of the administrator) by
mailing the material requested to the last
known address of the requesting

ee

4

participant or beneficiary within 30 days
after such request may in the court's
discretion be personally liable to such
participant or beneficiary in the amount
of up to $100 a day from the date of such
failure or refusal, and the court may in its
discretion order such other relief as it
deems proper.

COBRA NOTICE

The Consolidated Omnibus Budget Reconciliation Act
("COBRA") 29 U.S.C. provides

Sec. 1166. - Notice requirements

(a) In general — In accordance with
regulations prescribed by the Secretary -

(4) the administrator shall notify -

(A) in the case of a qualifying event
described in paragraph (1), (2), (4), or (6)
of section 1163 of this title, any qualified
beneficiary with respect to such event,
and

(B) in the case of a qualifying event
described in paragraph (3) or (5) of section
1163 of this title where the covered i
employee notifies the administrator under
paragraph (8), any qualified beneficiary
with respect to such event, of such
beneficiary's rights under this subsection.

§1161. Plans must __— provide
continuation coverage to certain
individuals

(a) In general — The plan sponsor of
each group health plan shall provide, in
accordance with this part, that each
qualified beneficiary who would lose
coverage under the plan as a result of a
qualifying event is entitled, under the
plan, to elect, within the election period,
continuation coverage under the plan.

§1162. Continuation coverage

For purposes of section 1161 of this
title the term "continuation coverage"
means coverage under the plan which
meets the following requirements:

(2) Period of coverage — The coverage
must extend for at least the period
beginning on the date of the qualifying
event and ending not earlier than the
earliest of the following:

(A) Maximum required period. -

* * *

In the case of a qualified beneficiary who
is determined, under title II or XVI of the
Social Security Act (42 U.S.C. 401 et seq.,
1381 et seq.), ... to have been disabled at

6

the time of the qualifying event,” any
reference in clause (I) or (ii) to 18 months
is deemed a reference to 29 months (with
respect to all qualified beneficiaries), but
only if the qualified beneficiary has
provided notice of such determination
under section 1166(8) of this title before
the end of such 18 months.

STATEMENT

When the deceased plan participant James Geissal
was terminated from employment status while suffering
from cancer, defendants gave him what purported to bea
COBRA notice which concealed the possibility or
conditions for an eleven month extension. 29 U.S.C. §
1162(2)(A). Geissal elected COBRA coverage and paid
premiums. Respondents did not treat their written notice
or Geissal’s election or premium payments as having
meaning. Respondents secretly held up the medical bills
they received for Geissal’s care during this time,
aggregating to $104,4587.34, and did not pay them.

After six months Respondents advised Geissal that
they were rescinding and revoking the COBRA notice,
dishonoring his election and their notice obligations ab
initio. Respondents told all the medical services
providers whose bills they had held up, that Respondents
were never responsible for payment. The providers were
told that they could only look to the TWA plan for
payment. Aetna was the TWA plan’s claims

YCongress later amended this provision to cover those
determined disabled within 60 days of the qualifying event.

7

administrator. Respondents were aware that there were
already decided appellate cases holding that the
terminating employer had the obligation to provide
health coverage under COBRA. Lutheran Hospital of
Indiana, Inc. v. Saint Joseph Medical Center, 51 F.3d 1308
(7th Cir. 1995); Oakley v. City of Longmont, 890 F.2d 1128
(10th Cir. 1989); King v. John Hancock Mutual Life Ins.
Co., 500 N.W.2d 619 (S.D. 1993). This Court said the
question was never even close, and charged the Eighth
Circuit with engaging in social legislation to ameliorate
the effects that Respondents’ counterviews would cause .
Geissal v. Moore Medical Corp., 524 U.S. 74 (1998)
(“Geissal 1’’).

After ruling by this Court in Geissal I, and remand,
the magistrate judge initially viewed his obligation to
address this Court’s footnote 3, 524 U.S. at 78.2

The parties presented to the district court an
elaborate spreadsheet on what part of what bills TWA
plan/Aetna had paid after Respondents’ rescission of their
COBRA notice. The spreadsheet also listed what parts of
what bills had been charged to the Geissal’s account or
paid by Petitioner, and what part Aetna had forced the

of This Court said in part

nothing in the record indicates one way or another whether Aetna
has fully reimbursed Geissal for James Geissal's medical bills.
Geissal's counsel represented at oral argument that at a minimum
there are unpaid medical bills incurred on a trip to the Greek Islands.
Quite apart from this, we cannot tell from the record whether Geissal
may be entitled to recover from Moore even if sometime later Aetna
would have a claim against Geissal to recover the insurance costs that
it paid.

8

providers to discount though they had no discounting
agreement with Respondents.

Based on the spreadsheet’s showing of what
Respondents gained by avoiding their COBRA
obligations, Petitioner urged the doctrine of negative
restitution entitled her to recover from Moore all the |
benefits it should have paid. However, Petitioner
proposed in both in the district court and on appeal to
hold all such monies that Moore wrongfully avoided
paying, be held by her in constructive trust for TWA plan
and for the discounting providers.

This constructive trust suggestion was long before
the case ever came to the second appeal. In the district
court Respondents acknowledged “Plaintiff, creatively,
has requested a constructive trust in favor of
TWA/Aetna.” On page 2 of her opening brief in the
current appeal to the Eighth Circuit, Petitioner noted
that constructive trust was a subject urged by plaintiff
below, saying

Moore’s counsel at one time assured the
[Supreme] Court his only concern was
that Moore “don’t intend to pay twice.”
Plaintiffs always recognized they would
have to deal with Aetna, the secondary
insurer acting for the TWA plan, once
benefits were paid. That recognition was
exactly why they urged McGee on the
district court, albeit more in terms of
constructive trust and common fund.
[citations omitted; emphasis supplied]

9

- The Eighth Circuit nonetheless determined
Petitioner had never raised the issue of constructive
trust until her reply brief on appeal.

Upon remand from this Court, Petitioner offered
the TWA plan contained a subrogation clause, confirming
Petitioner’s always stated position that “sometime later
Aetna would have a claim against Geissal to recover the
insurance costs that it paid” if Petitioner had obtained
any monetary relief whatsoever. Contrary to the Eighth
Circuit, 338 F.3d at 930, Petitioner always acknowledged
plaintiff's obligation under the TWA subrogation clause,
and in oral argument earlier told this Court that she will
have to deal with TWA plan if she recovers the relief she
seeks.

In that part of the Moore plan having to do with
the Moore plan’s coordination of benefits, one term
prohibited crediting the Moore plan for payment of any
benefits unless the Moore plan had paid the other
“coordinating” plan. Moore paid nothing to the TWA plan.

The question posed by this Court in its footnote 3
in Geissal I and quoted in footnote 2 above, was never
answered by the district court. The magistrate judge
concluded that when a participant seeking an unpaid
benefit dies at any time before the conclusion of
litigation, all rights to plan benefits under ERISA
§1132(a)(1) cease. He then appeared to accept the
doctrine that “restitution seeks to punish the wrongdoer
by taking his ill-gotten gains,” Geissal v. Moore Medical
Corp., 158 F.Supp.2d 976, 981 (E.D. Mo. 2001), but he
concluded this doctrine would somehow be giving plaintiff
what he called “compensatory damages.” Jd. at 983. He
did not address Petitioner’s suggestion that the monies be

10

held as a constructive trust for the many third parties
who had been injured, but instead joined the chorus of
lamenters of the inadequacy of proper ERISA remedies.
Id. at 983-84, as if ERISA tied his hands in awarding
restitution or creating a voluntary constructive trust.

- Without reference to this Court’s finding in
Geissal I of “no justification for [Respondents]
disparaging” statutory clarity, 524 U.S. at 87, and the
“draconian alternative” defendants would lead the nation
to accept, id. at 85, the magistrate judge and the Eighth
Circuit found Respondents had provided an initial
COBRA notice and they would go no further. Both lower
courts ignored the uncontested evidence that
Respondents made no attempt to comply with the notice
save for collecting premiums from Mr. Geissal, that.
Respondents held up over a hundred thousand dollars of
medical billings while premiums were being paid, and
then later Respondents “revoked” such notice retroactive
to the giving of the notice. Both lower courts found
Respondent’s conduct to have been “based on a
reasonable interpretation,” words foreign to Geissal I.
Both lower courts freed Respondents of all ERISA
imposed penalties for a written notice Respondents
voided ab initio.

REASONS FOR GRANTING THE WRIT

Upon remand in Geissal v. Moore Medical Corp.,
524 U.S. 74 (1998), on the issue of ERISA remedies the
Eighth Circuit rejected the ERISA doctrine of
restitution made clear by this Court in Great-West Life
Assurance Corp. V. Knudson, 524 U.S. 204 (2002), citing
Reich v. Continental Casualty Co., 33 F.3d 754 (7 Cir.

1994), assuring that the wrongdoer avoided any loss from

11

its COBRA obligations and shifted that loss to third
parties, whom Petitioner asked to protect by having her
hold such amounts of promised but unpaid benefits in
constructive trust for those who did eventually pay for
the health care Petitioner’s decedent required and which
Respondents refused to pay. The Eight Circuit instead
would again engage in its own form of social legislation by
its judicial amendment of ERISA to allow the a dual
coverage secondary plan that suffered loss due to
Respondents’ defalcation, to sue the Respondents as
wrongdoer directly for a monetary recovery for sums the
secondary plan paid in violation of ERISA’s limitation on
proper parties to an ERISA suit in 29 U.S.C. §1182(a) and
in violation of this Court’s decisions in Knudson, supra,
and in Mertens v. Hewitt & Associates, 508 U.S. 248
(1993) limiting parties and prohibiting monetary remedies
to all but the participant. The issue of the status of the
secondary payer to seek relief under ERISA does come
up, as exampled by past cases such as Winstead v. J.C.
Penney Co., 933 F.2d 576, 579-80 (7th Cir. 1991). This is
an important issue of ERISA remedies in dual coverage
situations that are not unique. Answer is needed.

The Eighth Circuit in determining ERISA
penalties, seemed determined to ignore this Court’s prior
finding that the Respondents disparaged the plain
meaning of the law to avoid their COBRA obligations,
and the Eighth Circuit wrongly puts form over substance,
finding that an illusory COBRA notice never intended to
be followed or have effect, and then revoked ab initio is
statutory notice and meets statutory notice and right of
election requirements. Adherence to this Court’s prior
opinion and statutory demands deserves further review
by this Court. Most courts impose penalties of some kind
even if the plan administrator is in good faith to assure

12
deterrence.

ARGUMENT

QUESTION 1. This case presents ERISA remedy
issues. The Eighth Circuit rejects the doctrine of
negative restitution, and legislatively creates new causes
of action for new parties in addition to those allowed in 29
U.S.C. §1132(a). To deny restitution the circuit creates
monetary remedies for third parties that do not exist
under ERISA except for participants. In prior oral
argument before this very Court, Geissal I, Respondents’
counsel said it only wanted to assure it only pays “once.”
Now the Eighth Circuit holds Respondents be entitled to
keep the monies they wrongfully avoided paying.
Respondents need not pay promised benefits even “once,”
they are to benefit by their wrongdoing under ERISA.

Although in oral argument in Geissal I Justice
Bryer and Respondents’ counsel engaged in a colloquy
which concluded that no double recovery was possible,
Respondents renewed the argument upon remand by this
Court. Geissal I. The Eighth Circuit chose to use the
term “windfall double recovery,” 338 F.3d at 930, putting
the onus on the victim rather than the wrongdoer, as if
negative restitution were an abhorrent concept and it
would serve ERISA purposes better if wrongdoers are
enriched, rather than give the promised benefits to
plaintiff who in turn is subjected to a subrogation clause
to pay third parties and who is herself willing to be
subjected to a constructive trust.

Although the Eighth Circuit criticized the time
consuming exposition of remedies by Petitioner’s counsel
while remedies were pursued in the district court, 388

13

F.3d at 935-36, as if this Court’s note 3 in Geissal I were to
be ignored, Petitioner had envisioned, explained and
proposed the viability of a constructive trust even before
this Court’s decision in Great-West Life Assurance Corp.
V. Knudson, 524 U.S. 204 (2002), made a holding in
constructive trust relevant. This Court said without a res
to impose a constructive trust, a plan as subrogee cannot
obtain monies the participant collects from third parties.
There must be a constructive trust. See, e.g.,
Administrative Committee of the Wal-Mart Stores, Inc.
V. Varco, 2003 U.S. App. LEXIS 17772 (7 Cir.
unpublished 2003) (constructive trust established in
participant to service subrogation claim of plan that paid
the health providers).

This case presents the Court with the opportunity
to address the issue of adequate ERISA remedies in dual
coverage or, more corrrectly, in coordination of benefits
cases in which two plans have no contractual or statutory
connection and neither has made any direct promise to
the other.

Unlike other remedies cases, this case also raises in
the dual coverage context the question of negative
restitution, what to do about misconduct to wrongly shift
the primary preempted benefits burden to another to
avoid losses that the Eighth Circuit puts beyond remedy.
338 F.3d at 932. Judge Posner in his decision in Reich v.
Continental Casualty Co., 33 F.3d 754 (7 Cir. 1994),
clearly and succinctly sets out the concept of negative
restitution as a valid ERISA and remedies concept. In
Great-West Life Assurance Corp. v. Knudson, 524 U.S.

204 (2002) the Court cited Judge Posner’s decision as the
one setting out the correct view of restitution, whether
legal or equitable, the latter calling for a res. Yet the

14

Eight Circuit says ERISA intended no remedy, no
restitution, legal or equitable, for the wrongdoer’s
avoidance of paying benefits it had promised and was
supposed to have paid. 338 F.3d at 932. Either Judge
Loken or Judge Posner err. They both can’t be right.

It is submitted the Eighth Circuit misreads this
Court’s Great West decision when it cites Great West to
reject Reich. Ina time when there is a clamor for better
remedy, the Eighth Circuit chooses to limit remedies
further.

The Eighth Circuit does not deny the secondary
plan (TWA plan) and its member participants have lost
monies they spent for Mr. Geissal’s care that was the
Moore plan’s primary obligation to pay. While it suggests
a decision favoring Petitioner would hurt the Moore plan,
in the instant case the Moore plan is wholly unfunded.
There is no trusteed monies at Moore in contrast to the
TWA plan, a Taft-Hartley plan wherein funding exists.
The Eighth Circuit is not protecting any participants in
the Moore plan, but solely Moore’s general revenues.
Moore has no welfare fund to which trust concepts might
apply. The Eighth Circuit decision cannot create the
Moore plan into some deserving institution to which the
doctrine of negative restitution of Reich would create a
harm to innocents. Courts often believe that some “fund”
exists when except for the largest employers there is
none, as is the case here with the Moore plan.

Recognizing it may stand accused of rewarding the
wrongdoer, the Eighth Circuit searched to find a way to
eliminating the dilemma. To do this the Eight Circuit all
but nullifies the decisions of this Court, such as Mertens
v. Hewitt& Associates, 508 U.S. 248 (1993) and Knudson,

15

supra, which clearly limits litigants for breach under
ERISA and prohibits monetary recoveries except to
participants under §1132(a)(1). Even the terribly dated
decision the Eighth Circuit relies upon to allow the TWA
plan the right to sue the Moore plan, Winstead v. J.C.
Penney Co., 933 F.2d 576, 579-80 (7th Cir. 1991), that
circuit recognized how tenuous it was at the time to allow
such a suit. How after Mertens and Knudson does the
TWA plan or other coordinating (secondary) coverage
plan sue under ERISA for monetary repayment of
benefits that the primary coverage plan, Moore, owed
only to its own participant Geissal? TWA plan is no party
to the Moore plan. No promises were made by
Respondents to TWA plan or its administrator. Is not the
Eighth Circuit once again engaged in legislation to effect
a “cure” for others, similar to its “substantial gap”
legislation condemned in Geissal I?

The Eighth Circuit never explain how after
Mertens and Knudson the TWA plan is to ever get a
monetary judgment against Moore for benefits not paid to
or for Geissal? TWA plan supplies no medical services to
be a provider assignee, as was the case in Lutheran Med.
Ctr. v. Contractors Health & Welfare Plan, 25 F.3d 616, -
619 (8 Cir. 1994), upon which the Eighth Circuit relies.
338 F.3d at 933. No patient assignments were ever even
in evidence in the instant case. Does this “carefully
reticulated” ERISA statute say a subrogee stands in the
shoes of a participant. Knudson suggests the two are
different. Cf., Community Health Plan of Ohio v. Musser,

347 F.3d 619 (6" Cir. 2003) (the courts are without
jurisdiction under ERISA to hear the claims of
enforcement of the subrogation clauses).

16

There are no state laws in this case enabling such
suits between non-contracting insurers even if they both
have (different or the same) coordination of benefits
clauses. Even if there were state laws, does not ERISA
preempt such laws. Cf. Arana v. Ochsner Health Plan,
338 F.3d 483 (5'" Cir. 2003) (complete preemption for
subrogation claims).

These questions beg for answer, for plans with the
primary obligations under COBRA and “funded” solely
by the employer paying for services out of general
corporate revenues as billed, are encouraged by the
Eighth Circuit to reject their COBRA obligations,
assured that time can only work only a benefit to them.
This case is example how a skillful defense can stall a case
for years until the lower court can even justify no remedy
sufficient to allow repaying the vulnerable secondary
plan. Geissal is no latecomer to raising his rights, as the
district court acknowledges. The issue of dual coverage
and who bears the responsibility for paying, and how
collection of those obligations to the secondary are to be
enforced, are greater than ever. Should the Eighth
Circuit once again be heard to suggest it need not wait for
legislation before allowing the TWA plan to. sue another
plan for a monetary remedy under ERISA which ERISA
does not allow, Mertens, in preference to allowing
Petitioner to obtain and hold such benefits in a
constructive trust for TWA plan and providers she has
long ago offered to assume.

QUESTION 2. The second question presented for
review more directly raises the question about plans in
dual coverage cases, such as this, and the Eight Circuit’s
unwillingness to give any credence to the plan terms that
affect what happens when there are plans that have

17

coordination of benefit provisions. When there are
coordinating plans and the Moore plan is primary, as
would be the case here,” the Moore plan expressly
prohibits Respondents from taking credit for any
payments made by a secondary plan unless Moore had
made payment to the secondary plan” The Eighth
Circuit reads this clause out of the plan, to find an earlier
appearing generic plan provision that provides “benefits
are not payable for . . . services for which there is no
obligation to pay,” somehow applicable because of
Respondents’ own default and disparagement of its
COBRA obligations.

There was an obligation on the Geissals to pay at
the time the bills when rendered, and the fact that TWA
plan had to come in to later make good because
Respondents refused, does not remove the fact that an
obligation had been incurred that became Moore’s
obligation. Even the Eighth Circuit had once agreed with
that. See Fosso v. State Farm Mut. Aut. Ins. Co., 940
F.2d 388 (8'" Cir. 1991) (at the time of receiving the bill
the plaintiff was entitled to the insurance benefit, and
insurer cannot take advantage of the other insurer’s

*Because of the magistrate judge’s view that death forecloses
benefits, he never had to determine whether any terms of the planas
to benefits had been breached, whether the coordination provisions
applied, and whether one looks only in hindsight almost ten years
after suit was brought, to see if medical bills were still owed. Though
it found the magistrate to have erred on the issue of death, the
Eighth Circuit chose not to remand, but to act as the trial court on
these construction issues.

#1V2(4) of the Moore plan provides its “benefits are
determined before those of the other program, and without
considering the other Program’s benefits.”

18

payments unless the other insurer is first liable). The
concept of not crediting the wrongdoer for later payments
of another insurer, even if not a coordinating one, is not
unusual outside ERISA. See Samsel v. Allstate Ins. Co.,
59 P.3d 281 (Az en banc 2002) reviewing cases. Missouri
follows the majority. Farmer v. Personnel Pool of Platt
County, 110 S.W.3d 818 (Mo. 2003). There is nothing in
the legislative history to suggest Congress intended by
ERISA to change state law interpretation of essentially
health insurance policies. See Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101, 112-113 (1989).

When to this we add the doctrine of negative
restitution, that a wrongdoer must be required to pay the
loss it improperly avoided by its disparagement of the law
and its own contract promises when there are
coordinating group plans, Reich, supra, the Eighth
Circuit opinion raises such a significant departure from
established law that a writ is deserving to determine
ERISA remedies.

QUESTION 3. On the third question dealing with
penalties, the Eighth Circuit practically discounts this
Court’s prior unanimous reversal. In most cases in which
there has been a failure of compliance with COBRA the
courts have had no difficulty in imposing some penalty,
even if they found defendant’s conduct had some
reasonable bases on either fact or law. See, e.g.
Daughtrey v. Honeywell, Inc., 3 F.3d 1488 (11 Cir. 1993)
(even if plaintiff suffered no prejudice, ERISA penalty
provisions were designed not to rectify prejudice to a
participant but “to punish noncompliance” with ERISA’s
statutory requirements: “the mere absence of bad faith no
more exonerates the [statutory] failure ... than does the
absence of prejudice to the plan participant.”) Accord,

———————

19

Moothart v. Bell, 21 F.3d 1499 (10 Cir. 1994) (upholding
$30/day penalty); Boone v. Leavenworth Anesthesia, Inc.,
20 F.3d 1108 (10 Cir. 1994) ($50/day penalty): Scott v.
Suncoast Beverage Sales, Ltd., 295 F.3d 1233 (11' Cir.
2002) (even if plaintiff suffered no prejudice and
defendant acted in good faith, $20/day for 18 months
duration was proper exercise of discretion). This past
month, for example, the Third Circuit determined
penalties appropriate even when the defendant had acted
in totally good faith. Veneziano v. Long Island Pipe
Fabrication & Supply, 2003 U.S. App. LEXIS 21735 (3"4
Cir. 2003).

Petitioner does not suggest the circuits to be much
“split” on the issue, for we have found no case other than
the instant one that suggests penalties are inappropriate
for a disparager, a word the courts below were unwilling
to even use after remand. In the instant case, how could
the magistrate judge or Eight Circuit have found
Respondents’ defiance of COBRA and the fraudulent
acceptance of premiums while holding up of payment of
bills as “reasonably justified” or in “good faith” when this
Court in Geissal I described Respondents’ conduct in
terms of “no justification for disparaging the clarity of
§1162(2)D)(i),” 524 U.S. at 87, and found Respondents
suggested “draconian alternatives” to Congressional
intent. 524 U.S. at 85. After this Court unanimously
determined in the earlier opinion that there was “no
Justification for disparaging the clarity” of statutory
requirements, the Eighth Circuit seemingly challenges
this Court to say that Respondents acted “in good faith.”
338 F.3d at 934.

The Eighth Circuit puts form over substance. Ifa
notice was issued, however inaccurate as to extensions,

20

both lower courts ignore the fact that Respondents ignore
it from the beginning. They held up billings amounting to
over a hundred thousand dollars while collecting Geissal’s
premiums, misleading Geissal to believe they were good
guys concerned about his welfare and thus dissuading him
from filing charges with the Equal Employment
Opportunity Commission for age and disability violations
in connection with his loss of employment. After the time
for filing charges with the EEOC had expired,
Respondents then rescinded the notice ab initio. None of
this notice withdrawal is of any interest to the Eighth
Circuit.

Respondents’ COBRA notice had been rendered
nothing more than an illusion. Cf. Franconia Associates
v. United States, 536 U.S.129, 142-143 (2002) (a promise
not intended to be kept is illusory and a repudiation). This
Court should not tolerate the evasion of statutory
obligations by putting form over substance. See, ¢.g.,
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985).
Congress surely did not intend the issuance of a notice
and a right to elect that the Respondents had no intent to
effectuate, meets the notice Congress required.
Respondents’ recision ab initio makes the giving itself a
nullity.

This Court has suggested in Franklin v. Gwinnett
Co. Public Schools, 503 U.S. 60, 76 (1992) that penalties
are all the more appropriate where because of intervening
events relief can no longer be given. While ERISA and
COBRA are not criminal statutes, the fact they these
statutes allow penalties and little civil remedy, makes
relevant Judge Posner’s observations in his recent
decision in Mathias v. Accor Economy Lodging, Inc., 2003
U.S. App. LEXIS 21299 (7 Cur. Oct. 21, 2003) which

t

21

suggests perhaps what we are looking at may be
something like the “civil alternative to criminal
prosecution of minor crimes.” In the instant case, for six
months plaintiff was even paying premiums unaware that
billings were being held up and going unpaid, what could
be a fraudulent taking of monies save for ERISA
preemption.

The Eighth Circuit makes very clear that
Respondents are to keep their wrongful gains from
paying benefits they avoided paying, which burden they
wrongfully shifted to others, even if it cuts down the size
of the funding available for participants in the TWA plan
that came to the rescue. If ERISA cuts down on
remedies, then the writ should be granted to determine if
penalties are appropriate for such blatant acts of
misconduct.

CONCLUSION

The Court should grant the petition for a writ of
certiorari and reverse the decision of the United States
Court of Appeals for the Eighth Circuit.

"The evidence is that the TWA plan is a trusteed Taft-
Hartley plan with actual funds held by trustees. In contrast, the
Moore plan is not a self-funded plan in the sense of having any funds
held in trust. The Moore plan is “funded” solely. by whatever amount
Moore Medical Corporation chooses from time to time to pay to
providers our of the corporation’s general revenues. The Eight
Circuit’s suggestion that a restitutional recovery will do harm to the
Moore plan is without evidential_support, unless the Eight Circuit
opinion uses the terms ”Moore plan” and “Moore pocketbook” as
synonyms. No Moore plan participant is thus endangered by any
relief Petitioner seeks.

22
Respectfully Submitted,

Sheldon Weinhaus
Counsel of Record
906 Olive Street
Suite 900
St. Louis, MO 63101-1463
(314) 621-8363
Attorney for Petitioner

la
(Any footnotes trail the end of each document)

No. 02-2255 No. 02-2256

UNITED STATES COURT OF APPEALS FOR THE
EIGHTH CIRCUIT

Bonnie L. Geissal, as personal representative of the
Estate of James W. Geissal,
Plaintiff- Appellant/Cross Appellee,

V.

Moore Medical Corporation, et al.,
Defendants-Appellees/Cross Appellants.

February 10, 2003, Submitted
July 31, 2003, Filed

COUNSEL: For Bonnie L. Geissal, Plaintiff -
Appellant (No. 02-2255): S. Sheldon Weinhaus,
WEINHAUS & DOBSON, St. Louis, MO.

For Moore Medical Corporation, Group Benefit Plan, of
Moore Medical Corp., Herbert Walker, Defendants -
Appellees (No. 02-2255): Edward M. Goldenhersh,
Daniel J. Schwartz, GREENSFELDER & HEMKER,
St. Louis, MO.

For Bonnie L. Geissal, Plaintiff - Appellee (No. 02-
2256): S. Sheldon Weinhaus, WEINHAUS & DOBSON,
St. Louis, MO.

For Moore Medical Corporation, Group Benefit Plan, of
Moore Medical Corp., Herbert Walker, Defendants -

2a

Appellants (No. 02-2256): Edward M. Goldenhersh,
Daniel J. Schwartz, GREENSFELDER & HEMKER,
St. Louis, MO.

JUDGES: Before HANSEN, * Chief Judge, LOKEN
and SMITH, Circuit Judges.

OPINIONBY: James B. Loken
OPINION: LOKEN, Chief Judge.

After Moore Medical Corporation ("Moore") terminated
employee James Geissal in 1993, he elected to purchase
continuation health insurance coverage’ through
Moore's Group Benefit Plan (the "Moore Plan"). Some
months later, the Moore Plan canceled this coverage
when it determined that Geissal was not entitled to
continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1986 ("COBRA"), 29
U.S.C. §§ 1161-1169, which amended the Employee
Retirement Income Security Act ("ERISA"), 29 U.S.C.
§§ 1001 et seq. Geissal sued Moore, the Moore Plan, and
its administrator, alleging that he was entitled to at
least eighteen months of COBRA coverage. The
Supreme Court ultimately agreed and remanded the
case for further proceedings.

On remand, addressing questions of remedy, the
district court denied Geissal compensatory damages
and statutory penalties but granted him an award of $
217,369.70 in attorney's fees. Geissal's widow appeals on
behalf of his estate, seeking money damages, penalties,
and additional attorney's fees under 29 U.S.C. § 1132(a),
(c), and (g). Moore cross-appeals, arguing that the
district court erred in awarding attorney's fees because

3a

Geissal is not a prevailing party. We affirm the district
court in all major respects but remand for further
consideration of whether the estate should recover
unreimbursed medical expenses paid by Geissal or the
estate.

I. Background

Throughout Geissal's employment at Moore, Trans
World Airlines ("TWA") employed his wife, Bonnie
("Mrs. Geissal"). Geissal as her spouse was covered
under TWA's health insurance plan (the "TWA Plan"),
which was administered by Aetna Life Insurance
Company ("Aetna"). Before Moore terminated Geissal
in July 1993, the Moore Plan paid for his ongoing cancer
treatments. The Moore Plan is a self-funded employee
welfare benefit plan governed by ERISA and COBRA.
After Geissal's termination, he elected COBRA
continuation coverage under the Moore Plan and made
six monthly premium payments of $ 148.51 per month.
In January 1994, the Moore Plan cancelled the COBRA
coverage and refunded Geissal's premium payments
because he was also covered by the TWA Plan during
this period.

After the cancellation, Aetna as administrator of the
TWA Plan paid nearly all claims for medical expenses
incurred by Geissal between the date of his termination
and January~ 17, 1995, when the eighteen-month
COBRA continuation coverage period ended. During
that period, the TWA Plan paid $86,795.25 to Geissal's
health care providers and $ 6,528.65 to Geissal for his
covered out-of-pocket expenses. During this same
period, Geissal did not seek reimbursement for
expenses incurred on a trip to Greece for cancer

4a

treatment, and he incurred $ 4,425.55 in medical
expenses that the TWA Plan declined to reimburse.

Geissal commenced this lawsuit in June 1994, seeking
compensatory damages for past due COBRA benefits,
injunctive and equitable relief, penalties under 29
U.S.C. § 1182(c), and costs and expenses including
reasonable attorney's fees. After Geissal died on June
23, 1995, Mrs. Geissal as representative of his estate
was substituted as plaintiff. The district court granted
summary judgment in favor of the defendants. Geissal
v. Moore Medical Corp., 927 F. Supp. 352 (E.D. Mo.
1996). We affirmed, construing the term "first becomes .
. . covered under any other group health plan" in 29
U.S.C. § 1162(2)(D)(i) as including Geissal's pre-existing
coverage under the TWA Plan. Geissal v. Moore
Medical Corp., 114 F.3d 1458 (8th Cir. 1997). The
Supreme Court granted certiorari, rejected our
interpretation of the statute, and remanded. Geissal v.
Moore Medical Corp., 524 U.S. 74, 82, 87, 141 L. Ed. 2d
64, 118 S. Ct. 1869 (1998).

On remand, the principal remedy issue was whether
Geissal may recover the substantial health benefits paid
on his behalf by Aetna and the TWA Plan. In rejecting
this claim, the district court ruled that Geissal's estate
was entitled to no monetary relief under 29 U.S.C. §
1132(a). Geissel v. Moore Medical Corp., 158 F. Supp. 2d
976 (E.D. Mo. 2001). The court subsequently denied
Mrs. Geissal's motion for an award of statutory
penalties under § 1132(c)(1)(A) but granted in part her
motion for an award of attorney's fees under §
1132(¢)(1). All of these rulings are challenged on appeal.
We review the summary judgment rulings de novo. See

5a

Phillips-Foster v. Unum Life Ins. Co. of Am., 302 F.3d
785, 794 (8th Cir. 2002).

II. Monetary Relief

Before turning to the applicable ERISA remedial
provisions, it may be helpful to outline the principal
issue as to monetary relief -- whether Mrs. Geissal may
recover the health benefits paid to Geissal's medical
providers by Aetna on behalf of the TWA Plan. The
Moore Plan provides that "benefits are not payable for .

. services for which there is no obligation to pay."
Defendants argue that Geissal and his estate have no
obligation to pay the substantial medical expenses paid
by Aetna under the TWA Plan. Mrs. Geissal concedes
She has no obligation to reimburse the TWA Plan for
paying those expenses but argues she is entitled to
recover those benefit payments because the Moore Plan
would have paid them but for its wrongful cancellation
of Geissal's COBRA continuation coverage. Defendants
respond that, assuming the TWA Plan's coverage was
secondary to the Moore Plan's primary COBRA
coverage, the Moore Plan's coordination of benefits
provisions provide a remedy to the secondary insurer,
the TWA Plan. But those provisions provide no remedy
to the plan participant or beneficiary, who would
receive a windfall double recovery if allowed to recover
expenses already paid by a third party. Mrs. Geissal
replies that the third parties in this case -- which
include medical providers who discounted their bills to
Aetna, as well as Aetna and the TWA Plan -- have
failed to assert timely claims against Moore and the
Moore Plan for reimbursement, so she should be
entitled to recover on their behalf to prevent the self-

6a

funded Moore Plan from being unjustly enriched by its
wrongful denial of COBRA coverage.

Because ERISA preempts state law remedies, the
parties agree that Mrs. Geissal's right to this remedy
must be found in ERISA's remedial provisions and
more particularly in 29 U.S.C. § 1182(a), which provides
in relevant part:(a) ... A civil action may be brought -
(1) by a participant or beneficiary —

* *K KOK *K

(B) to recover benefits due to him under the terms of
his plan, to enforce his rights under the terms of the
plan, or to clarify his rights to future benefits under the
terms of the plan....

(3) by a participant, beneficiary, or fiduciary (A) to
enjoin any act or practice which violates any provision
of this subchapter or the terms of the plan, or (B) to
obtain other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan. The district court
concluded that Mrs. Geissal is not entitled to monetary
relief under either § 1132(a)(1)(B) or § 11382(a)(8)(B). On
appeal, she challenges both rulings.

A. Relief Under § 1132(a)(1)(B). The district court
concluded that Mrs. Geissal and the estate may not
recover plan benefits under § 1132(a)(1)(B) because
Geissal, the plan beneficiary, is deceased. 158 F. Supp.
2d at 982. The statute provides that "[a] civil action may
be brought .. . by a participant or beneficiary." But we
have declined to construe this language as precluding
ERISA claims after the participant or beneficiary has

Ta

died. In Shea v. Esensten, 107 F.3d 625, 628 (8th Cir.),
cert. denied, 522 U.S. 914, 139 L. Ed. 2d 229, 118 S. Ct.
297 (1997), we held that the representative of a
deceased participant's estate had standing to sue for
breach of ERISA fiduciary duties. In McGee v.
Funderburg, 17 F.3d 1122 (1994), we upheld a widow's
claim for COBRA continuation benefits without
discussing the issue. Addressing the precise question
here at issue, the Third Circuit held that an action for
benefits under § 1132(a)(1)(B) survives the death of the
beneficiary because Congress intended ERISA to be
remedial, and "actions that are remedial in nature
generally survive the death of a party." Harrow v.
Prudential Ins. Co. of Am., 279 F.3d 244, 248 (8d Cir.
2002). We agree. Therefore, the district court erred in
ruling that Geissal's estate may not recover Moore Plan
benefits under § 1132(a)(1)(B). nl

(1) That brings us to the main issue, whether Mrs.
Geissal may recover benefits paid by the TWA Plan.
Section 1132(a)(1)(B) provides that a participant or
beneficiary may recover "benefits due to him under the
terms of his plan." COBRA provides that continuation
coverage must be "identical to the coverage provided
under the plan to similarly situated beneficiaries." 29
U.S.C. § 1162(1). The Moore Plan provides that
"benefits are not payable for .. . services for which
there is no obligation to pay." In our view, the plain
language of § 1132(a)(1)(B) and the Moore Plan
preclude Mrs. Geissal from recovering medical
expenses paid by another health insurer. See Larocca v.
Borden, Inc., 276 F.3d 22, 30-31 (1st Cir. 2002).

On appeal, Mrs. Geissal argues that § 1132(a)(1)(B)
allows her to recover the TWA Plan benefit payments

8a

and the medical provider discounts under a legal
restitution theory. As support for this novel theory,
Geissal relies upon the Supreme Court's recent decision
in Great-West Life & Annuity Insurance Co. v.
Knudson, 534 U.S. 204, 151 L. Ed. 2d 635, 122 8S. Ct. 708
(2002), which held that legal restitution may not be
recovered under § 1132(a)(3) because it is not "equitable
relief." However, Knudson did not address whether a
participant or beneficiary may recover legal restitution
under § 1132(a)(1)(B). We doubt that such a remedy is
available, because the statute is expressly limited to
claims for benefits due "under the terms of the plan."
But even if a claim for legal restitution is available
under § 1132(a)(1)(B), the Supreme Court limited the
theory to a claim in which the plaintiff can "show just
grounds for recovering money to pay for some benefit
the defendant had received from him." Knudson, 534
U.S. at 213 (emphasis added) (quotation omitted). Here,
any unjust enrichment of the Moore Plan resulted from
benefits indirectly conferred by third parties, not by
Geissal or his estate. Thus, Mrs. Geissal has no claim for
legal restitution.

(2) Concluding that Mrs. Geissal may not recover TWA
Plan payments and provider discounts does not end our
inquiry under § 1132(a)(1)(B). Mrs. Geissal also argues
that the Moore Plan is liable for $ 4,425.55 in health
expenses paid by Geissal that were not covered by the
TWA Plan, n2 and for some $ 9,000 in expenses for
cancer treatments in Greece. Defendants argue that
Mrs. Geissal is entitled to no recovery whatsoever
because $ 1,811.47 of the $ 4,425.55 was for uncovered
expenses, the remainder is less than COBRA premiums
and deductibles that Geissal would have been required
to pay, and the Greek cancer treatments were not

9a

covered expenses because they were "experimental in
nature or application." The district court did not resolve
these issues because it ruled that an estate may not
recover under § 1132(a)(1)(B). As the issues are
contested, we remand for further consideration of
whether Mrs. Geissal may recover all or any part of
these amounts as "benefits due . . . under the terms of
his plan." We note that this case is very old, and we
encourage the parties to settle this small remaining
part of the original dispute. To encourage common
sense in this regard, we instruct the district court that
any attorney's fee awarded for the proceedings on
remand may not exceed one-third of the remaining
amounts in controversy.

B. Relief Under Section 1132(a)(3). Alternatively, Mrs.
Geissal argues that she may recover TWA Plan
payments and provider discounts under 29 U.S.C. §
1132(a)(8)(B), which provides that a participant or
beneficiary may obtain "appropriate equitable relief" to
redress ERISA violations. Mrs. Geissal argues that this
provision entitles her either to equitable restitution or
to an order directing the Moore Plan to pay Geissal's
medical expenses into a constructive trust for the
benefit of the TWA Plan and Geissal's health care
providers. n3

As the district court recognized, 158 F. Supp. 2d at 981,
we have twice held "that where a plaintiff is ‘provided
adequate relief by the right to bring a claim for benefits
under . . . § 1182(a)(1)(B),' the plaintiff does not have a
cause of action to seek the same remedy under §
1132(a)(3)(B)." Conley v. Pitney Bowes, 176 F.3d 1044,
1047 (8th Cir. 1999), cert. denied, 528 U.S. 1136, 145 L.
Ed. 2d 930, 120 S. Ct. 979 (2000), quoting Wald v.

10a

Southwestern Bell Corp. Customeare Med. Plan, 83
F.3d 1002, 1006 (8th Cir. 1996); accord Larocca, 276
F.3d at 28-29, and cases cited). As the Supreme Court
observed in Varity Corp. v. Howe, 516 U.S. 489, 515,
134 L. Ed. 2d 130, 116 S. Ct. 1065 (1996), "Where
Congress elsewhere provided adequate relief for a
beneficiary's injury, there will likely be no need for
further equitable relief, in which case such relief
normally would not be ‘appropriate.'" Thus, Mrs.
Geissal may not seek to recover these amounts both as
benefits due under § 1182(a)(1)(B) and as equitable
restitution under § 1132(a)(8).

Mrs. Geissal argues her right to this kind of equitable
relief was established by our decision in McGee, 17 F.3d
at 1126. We disagree. Our opinion in McGee did not
identify the ERISA remedial provision under which we
granted COBRA coverage relief. McGee is best viewed
as granting relief under § 1132(a)(1)(B). Indeed, if our
decision in McGee was based upon the grant of
equitable relief under § 1182(a)(8), it was superseded by
the Supreme Court's subsequent decision in Varity
Corp. as construed by this court in Conley and Wald.

III. Statutory Penalties

COBRA requires that a plan administrator notify any
qualified beneficiary "of such beneficiary's rights under
{COBRA|" upon the occurrence of a qualifying event. 29
U.S.C. § 1166(a)(4). ERISA remedies include a
provision that an administrator who breaches this duty
"may in the court's discretion be personally liable to
such participant or beneficiary in the amount of up to $
100 a day." 29 U.S.C. § 1132(c).

lla

At termination, Moore sent Geissal a written COBRA
notice and election form substantially similar to the
Department of Labor model COBRA notice. Mrs.
Geissal argues that the Moore Plan administrator is
nonetheless liable for § 1182(c) penalties because (i) the
notice failed to advise that Geissal would be entitled to
an additional eleven months of COBRA coverage if the
Social Security Administration determined he was
disabled at the time of the qualifying event; and (ii)
Moore later revoked COBRA coverage based upon an
interpretation of the statute later rejected by the
Supreme Court. The district court declined to assess
penalties, concluding that Moore's notice was based
upon a reasonable interpretation of the law. We review
that ruling for abuse of discretion. Chesnut v.
Montgomery, 307 F.3d 698, 703 (8th Cir. 2002).

Section 1132(c) authorizes penalties for noncompliance
with the notice requirements of § 1166(a)(4). See
Chesnut, 307 F.3d at 704. Therefore, the issue under §
1132(c) is whether the plan administrator gave a proper
notice, not whether Geissal was improperly denied
COBRA continuation coverage. The notice must
adequately inform the beneficiary of the COBRA
coverage he is entitled to receive (or, in this case,
arguably entitled to receive) and the money owed to
maintain this coverage. Lincoln Gen. Hosp. v. Blue
Cross/Blue Shield, 963 F.2d 1136, 1140 (8th Cir. 1992).
Here, the only alleged deficiency in the-initial notice
was its failure to advise that coverage was available for
a longer period if Geissal was disabled on the date of his
termination. As we have noted, Geissal was not eligible
for this additional continuation coverage. See supra
note 2. Mrs. Geissal argues that, with proper notice,
Geissal could have persuaded the Social Security

12a

Administration to adopt an earlier onset date, thereby
making him eligible. We reject this contention. as
entirely speculative. Moreover, to trigger the additional
coverage, the qualified beneficiary must notify the plan
administrator of the disability determination. See 29
U.S.C. § 1166(a)(3) (Supp. I. 1989). Geissal gave no such
notice before the Moore Plan administrator sent him
the July 1993 COBRA notice. Finally, because Geissal
elected continuation coverage, no harm resulted from
this alleged notice deficiency. See Chesnut, 307 F.3d at
702. In these circumstances, the district court did not
abuse its discretion in refusing to impose § 1132(c)
penalties for the Moore Plan administrator's good faith
attempt to comply with the COBRA notice
requirements.

IV. Attorney's Fee Issues

ERISA's remedial provisions include the discretion to
award attorney's fees to either party: "In any action
under this subchapter . . . by a participant, beneficiary,
or fiduciary, the court in its discretion may allow a
reasonable attorney's fee and costs of action to either
party." 29 U.S.C. § 1132(g)(1). At the end of this
protracted litigation, the district court concluded that
Mrs. Geissal was a prevailing party and awarded her $
217,369.70 in attorney's fees and expenses. In arriving
at that amount, the court determined a reasonable fee
using the lodestar method and then reduced the fee by
fifty percent because of her limited success. On appeal,
Mrs. Geissal argues she is entitled to a substantially
increased award. In their cross appeal, defendants
argue the fee award should be overturned because Mrs.
Geissal is not a prevailing party. Reviewing the district
court's fee award for abuse of discretion, we reject both

13a

contentions. See Griffin v. Jim Jamison, Inc., 188 F.3d
996, 997 (8th Cir. 1999) (standard of review).

A. Was a Fee Award Proper? In responding to the
cross appeal, Mrs. Geissal initially argues that she need
not be a prevailing party to receive a fee award under §
1132(g)(1). Though she cites no support for this
contention, it is an interesting issue that has received
considerable attention in other circuits. See Gibbs v.
Gibbs, 210 F.3d 491, 501-03 (5th Cir. 2000) (citing cases
discussing attorney's fees in ERISA cases). This court
has frequently assumed that only prevailing parties
may be awarded fees in ERISA cases. See, e.g., Martin
v. Ark. Blue Cross & Blue Shield, 299 F.3d 966, 970-71
(8th Cir. 2002) (en banc), cert. denied, 154 L. Ed. 2d 893,
123 S. Ct. 967 (2003) (overruling the presumption that
ERISA prevailing parties are entitled to a fee award);
Jackson v. Metro. Life Ins. Co., 303 F.3d 884, 890 (8th
Cir. 2002) (vacating a fee award after reversing on the
merits). The fact that the statute does not expressly
limit fee awards to prevailing parties is significant, but
not conclusive. In Ruckelshaus v. Sierra Club, 463 U.S.
680, 698, 77 L. Ed. 2d 938, 103 S. Ct. 3274 (1983), for
example, a divided Supreme Court concluded that "the
language and legislative history of § 307(f) [of the Clean
Air Act] do not support respondents' argument that the
section was intended as a radical departure from
established principles requiring that a fee claimant
attain some success on the merits before it may receive
an award of fees." But we do not read the decision in
Ruckelshaus as necessarily meaning that the Court
would construe what it has often referred to as
"ERISA's carefully crafted and detailed enforcement
scheme" the same way. Knudson, 534 U.S. at 209
‘(quotation omitted). In this case, we agree with the

14a

district court that Mrs. Geissal was a prevailing party
for fee award purposes. Therefore, we leave unresolved
the question whether, in ERISA cases, a district court
may only award attorney's fees to a prevailing party.

Defendants argue that Mrs. Geissal was not a
prevailing party because she was granted no relief. We
agree with the district court that she became a
prevailing party when "she obtained a favorable ruling
from the United States Supreme Court that Moore's
basis for denying Geissal benefits was invalid." The
Supreme Court has expressly recognized that a fee
award may be appropriate when a party “has
established the liability of the opposing party, although
final remedial orders have not been entered." Hanrahan
v. Hampton, 446 U.S. 754, 757, 64 L. Ed. 2d 670, 100 S.
Ct. 1987 (1980). To be sure, such an interlocutory order
must create a "material alteration of the legal
relationship of the parties" to confer prevailing party
status. Texas State Teachers Ass'n v. Garland Indep.
School Dist., 489 U.S. 782, 792-93, 103 L. Ed. 2d 866, 109
S. Ct. 1486 (1989). That test is satisfied by the Supreme
Court's ruling that Geissal was entitled to COBRA
continuation coverage. This ruling would have entitled
Geissal to injunctive relief had the coverage period then
been unexpired, and it entitled his estate to seek
monetary relief under § 1132(a)(1)(B), which for the
most part it was unable to prove.

B. Was the Fee Award an Abuse of Discretion? In
determining the amount of attorney's fees to award, the
district court first applied the five-factor test set forth
in Lawrence v. Westerhaus, 749 F.2d 494, 495-96 (8th
Cir. 1984), and then applied the lodestar method to
calculate a reasonable fee. Mrs. Geissal argues the court

15a

abused its discretion when it set lead counsel's lodestar
rate at $ 250 per hour, rather than the $ 350- $ 500 per
hour requested; when it failed to enhance the lodestar
rate; and when it reduced the award by fifty percent
because of her limited success in the litigation. After
careful review of the record, we _ reject these
contentions. The Supreme Court's favorable ruling
came nearly three years after Geissal died. Mrs.
Geissal's attorneys then spent approximately 750 hours
pursuing novel damage theories that were determined
to be almost totally without merit. "A reduced fee
award is appropriate if the relief, however significant,
is limited in comparison to the scope of the litigation as
a whole." Hensley v. Eckerhart, 461 U.S. 424, 440, 76 L.
Ed. 2d 40, 108 S. Ct. 1933 (1983). Here, Mrs. Geissal
prevailed on the question of liability and then wasted
valuable resources of all the parties, including an
ERISA plan, in litigating monetary remedy questions
that should have been settled. The district court did not
abuse its discretion in reducing by fifty percent the
award determined by the lodestar method.

The judgment of the district court is reversed and the
case is remanded for further consideration of the issues
discussed in Part IJ.A.(2) of this opinion. In all other
respects, the judgment of the district court is affirmed.
Appellant's Motion To Strike Supplemental Appendix
is denied.

FOOTNOTES

* The Honorable David R. Hansen stepped down as
Chief Judge at the close of business on March 31, 2003,
succeeded by the Honorable James B. Loken.

16a

nl The district court relied for its contrary conclusion
on Turner v. Fallon Community Health Plan, Inc., 127
F.3d 196, 198 (1st Cir. 1997), cert. denied, 523 U.S. 1072,
140 L. Ed. 2d 666, 118 S. Ct. 1512 (1998), and on Bast v.
Prudential Insurance Co. of America, 150 F.3d 1008,
1009 (9th Cir. 1998), cert. denied, 528 U.S. 870, 145 LE.
Ed. 2d 144, 120 S. Ct. 170 (1999). But those cases
involved claims for money damages for the beneficiary's
death after the plan denied coverage for a medical
procedure the beneficiary could not afford. The courts
decided that § 1132(a)(1)(B) does not permit a damage
action for breach of the plan, only for benefits due
under the plan. They did not decide the issue in this
case, whether a beneficiary's estate may recover money
benefits due under the plan before the beneficiary died.

n2 This amount does not include unreimbursed medical
expenses Geissal incurred between the end of the
eighteen-month COBRA period and June 23, 1995, the
date of his death. Mrs. Geissal argues the Moore Plan is
liable for these expenses because he was entitled to an
additional eleven months of COBRA coverage when the
Social Security Administration determined in March
1994 that Geissal was disabled as of September 3, 1993.
We disagree. The COBRA provisions in effect at the
time Geissal was terminated granted eleven additional
months of continuation coverage to a qualified
beneficiary "who is determined, under title II or XVI of
the Social Security Act ...to have been disabled at the
time of a qualifying event," here, termination. 29 U.S.C.
§ 1162 (2)(A)(iii) (Supp I. 1989) (emphasis added). As
Geissal was not disabled when he was terminated on
July 17, 1993, he did not qualify for the additional
eleven months of COBRA coverage.

17a

n3 Geissal first suggested the constructive trust
remedy in the middle of her lengthy, scatter-gun reply
brief. The theory is unsound, in part because it is not
"appropriate" equitable relief to make the plan
beneficiary's estate a constructive trustee for third
parties who could have, but did not, assert their own
rights against the beneficiary and/or the Moore Plan.
See Larocca, 276 F.3d at 31; Lutheran Med. Ctr. v.
Contractors Health & Welfare Plan, 25 F.3d 616, 619
(8th Cir. 1994); Winstead v. J.C. Penney Co., 933 F.2d
576, 579-80 (7th Cir. 1991).

18a
No. 4:94 CV 1263 DDN

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

BONNIE L. GEISSAL,
Plaintiff,

V.

MOORE MEDICAL CORP., GROUP BENEFIT
PLAN OF MOORE MEDICAL CORP., AND
HERBERT WALTER,

Defendants.

MEMORANDUM

March 29, 2002

This action is before the court upon the motion of
plaintiff for the imposition of penalties (Doc. No. 167),
for an award of attorneys' fees and costs against
defendants (Doc. No. 169), and for reconsideration of
the decision denying monetary relief (Doc. No. 198).

Defendants argue that plaintiff is not entitled to
penalties, and that she is not entitled to fees or costs,
because she is not the prevailing party. Defendants
argue, alternatively, that the fees and costs claimed are
excessive.

The parties consented to the exercise of plenary
authority by the undersigned Magistrate Judge under

19a

28 U.S.C. § 636(c). A hearing was held on January 14,
2002.

BACKGROUND

James Geissal, the late husband of plaintiff Bonnie L.
Geissal, commenced this four-count action under the
Employee Retirement Income Security Act (ERISA),
as amended by the Comprehensive Omnibus Budget
Reconciliation Act of 1996 (COBRA). Defendants are
Geissal's former employer, Moore Medical Corporation;
the Group Benefit Plan of Moore Medical Corporation;
and Herbert Walter, the Plan Administrator
(collectively, Moore). Count I claimed that Moore
violated COBRA by failing to provide James Geissal
with continuation health insurance coverage after
terminating his employment. Count II claimed that
Moore was estopped from denying Geissal COBRA
coverage, because he relied on its initial representation
that he was entitled to such coverage. Count III
claimed that Moore's misrepresentation waived any
right to assert a reading of the plan that would deprive
Geissal of continuation coverage. Count IV claimed that
plan administrator Walter violated COBRA by failing
to provide Geissal with certain requested plan
documents.

On July 16, 1993, Moore terminated James Geissal from
employment. At that time, he was 62 years old and had
cancer. During his employment at Moore, Geissal was a
participant in the employee health benefits plan
sponsored by Moore, a plan subject to ERISA and
COBRA. The plan or its reinsurer paid large sums for
medical care provided to Geissal prior to his
termination.

20a

While he was employed by Moore, Geissal was covered
also by the group health plan provided by his wife's
employer, Trans World Airlines (TWA), through Aetna
Life Insurance Company. Upon his termination from
Moore, Geissal received notice of his right under
COBRA to continue health insurance coverage for 18
months under Moore's plan. He elected to continue this
coverage and began making premium payments, which
Moore accepted.

Approximately six months after his termination,
relying upon 29 U.S.C. § 116 (2)(D)(i),’ Moore informed
Geissal that he was not entitled to continuation
coverage under COBRA, because he had been already
covered under the Aetna group policy. The COBRA
premiums Geissal had paid were returned. The cost of
most? of the medical care Geissal received after his
termination was not paid by the Moore plan, but by the
TWA/Aetna plan.

After limited discovery, Geissal moved for summary
judgment on Counts I and II of the complaint. He
argued that Moore's reliance on § 1162 (2)(D)(i) was
misplaced, because he was covered under the TWA
plan before he elected COBRA continuation coverage,
not after. In any event, Geissal maintained, Moore was
estopped from denying him continuation health
benefits, because he had detrimentally relied upon its
assurances that he was entitled to these benefits. While
the summary judgment motion was pending, on June
23, 1995, Geissal died of cancer. Bonnie Geissal, his wife
and personal representative of his estate, was
substituted for him as plaintiff in this action.

2la

In March 1996, this court denied Geissal's motion for
summary judgment on Counts I and II, and granted
summary judgment for Moore on these counts. Geissal
v. Moore Med. Corp., 927 F. Supp. 352, 361 (E.D. Mo.
1996). On Count I, the court concluded that under §
1162(2)(D)(i) an employee with coverage under another
group health plan as of the date he elects COBRA
continuation coverage is ineligible four COBRA
coverage. On Count II, the court held that Geissal had
presented insufficient evidence of detrimental reliance
on Moore's initial representation that he was entitled to
benefits under COBRA. On interlocutory appeal, the
Eighth Circuit Court of Appeals affirmed. Geissal v.
Moore Med. Corp., 114 F.3d 1458 (8th Cir. 1997).

The United States Supreme Court granted Geissal's
petition for certiorari in order "to resolve a conflict
among the Circuits on whether an employer may deny
COBRA continuation coverage under its health plan to
an otherwise eligible beneficiary covered under another
group health plan at the time he elects coverage under
COBRA." Geissal v. Moore Med. Corp., 524 U.S. 74, 79
(1995). On June 8, 1998, the Supreme Court reversed.
and remanded the action. The Court held that the
existence of other coverage did not disqualify James
Geissal from being a "covered employee" or a qualified
beneficiary of the Moore plan under ERISA. Id. It held
that Moore was obligated to provide Geissal with
coverage under COBRA, because the language of §
1162(2)(D) (i) clearly referred only to coverage added
after COBRA was elected. Id. at 84-86. The Supreme
Court's ruling related to the Count I claim; the denial of
relief on the Count II claim was left undisturbed. By
separate order, the Supreme Court awarded Bonnie

22a

Geissal printing costs and clerk's costs in the amount of
$2,302.55.

On August 31, 1998, plaintiff moved this court for
reconsideration of her motion for summary judgment
on (a) the main issue of Moore's obligation to have
provided COBRA coverage to James Geissal, (b)
whether Moore provided Geissal with a valid notice of
his rights, (c) whether Moore actually covered Geissal
as the law required, (d) whether Moore was justified for
not providing the required notice and coverage, and (e)
whether Moore should pay Geissal restitution of unpaid
benefits, statutory penalties, fees, and costs.

On March 23, 1999, consistent with the rulings of the
Supreme Court and the Eighth Circuit Court of
Appeals on remand, this court held that Moore was
obligated to provide COBRA coverage to Geissal. The
court, however, ruled that the balance of the relief
sought by plaintiff, monetary damages, penalties, fees
and costs, must await further fact finding proceedings.
Thereafter, the parties engaged in discovery litigation,
plaintiff unsuccessfully moved to disqualify defendants'
counsel, and the parties sought summary judgment on
plaintiffs claims.

On August 4, 2000, the parties filed cross-motions for
partial summary judgment on Geissal's Count. I claim
for damages. Geissal argued that Moore had been
unjustly enriched in the amount of approximately
$145,000 by its failure to provide COBRA benefits to
James. Therefore, Geissal argued, she was entitled to
"other appropriate equitable relief," as provided for by
29 U.S.C. § 1132(a)(8),? in the form of restitution.
Geissal submitted documentation that James had

' GSE: Ragen ee

23a

incurred approximately $9,000 in expenses for the trip
to Greece. She argued that she was entitled to recover
this amount under the Moore plan provision that
covered alternative medical treatments that are cost-
effective and "in accordancé with accepted standards of
medical practice." Geissal submitted published articles
describing the immunology treatment provided in
Greece.

Moore argued that Geissal was not entitled to any
monetary relief. Under 29 U.S.C. 1132(a)(1)(B)* and the
Moore plan, her damages were limited to the
unreimbursed out-of-pocket medical expenses covered
under the Moore plan, assuming James had been
provided with COBRA continuation coverage, less the
deductible and premium payments that would have
been due Moore for such coverage. The amount of his
unrelmbursed® expenses from July 17, 1998, through
January 17, 1995, was $2,614.08, which is less than the
$2,973.18 in deductibles and premiums that would have
been due Moore.

Moore argued that the unreimbursed medical expenses
for the trip to Greece were not covered under the
Moore plan, because they were excluded as
experimental, unapproved’ treatments. Moore
submitted articles establishing that the "'"Greek Cancer
Cure" did not meet the usual medical industry
standards.

Moore argued that any claim TWA/Aetna may have
against Geissal for reimbursement, if Moore were to
pay Geissal now for expenses already paid by
TWA/Aetna, would be barred by the statute of
limitations. Furthermore, any claim TWA/Aetna may

24a

have against Moore was between those two parties.
Therefore, argued Moore, to allow Geissal to recover
for expenses paid by TWA/Aetna would present a
windfall to Geissal. Lastly, Moore argued that the relief
sought by Geissal was not “equitable relief” within the
meaning of § 1182 (a)(3).

On March 29, 1999 (Doc. No. 158), this court denied
Geissal's motion for summary judgment and sustained
Moore's motion for summary judgment on Count I's
claim for damages. The court reasoned that, because
James Geissal died, benefits under the plan were no
longer recoverable under § 1132(a)(1). The court then
considered the propriety of "other appropriace
equitable relief under § 1132(a)(3) and determined that
an award of restitution in this case would be the
equivalent of awarding compensatory damages, which
would be contrary to the holding In Mertens v. Hewitt
Assocs., 508 U.S. 248, 256-58 (1993 ), that § 1132(a)(8)
recovery is limited to classic equitable remedies. The
court recognized that this left Geissal without relief
against Moore, a consequence of the failure of Congress
to amend ERISA to reflect the changing realities of
insurance and health care practices. Counts II and III
were dismissed as moot, and the penalties sought in
Count IV, as well as the issue of attorneys' fees, were
reserved for later resoiution. At a hearing held on
January 14, 2002, Geissal voluntarily abandoned her
claim in Court IV, and this count will be dismissed.

RECONSIDERATION OF MARCH 29, 2001. ORDER

In her sur-rebuttal memorandum in support of the
motion for attorneys' fees and costs, discussed below,
Geissal invites the court to reconsider the March 29,

25a

2001, grant of summary judgment to Moore on her
Count I. In doing so, Geissal adverts to a recent
decision of the first Circuit, LaRocca v. Borden Inc., 276
F.3d 22 (1* Cir. 2002). LaRocca supports this court's
determination that forcing Moore to pay Geissal the
costs of James's medical expenses during the COBRA
period is not a form of equitable relief available under
ERISA. In that case, retirees who were improperly
terminated from their former employer's ERISA health
plan sought, in addition to reinstatement in the plan,
the amount by which the employer was "unjustly
enriched" by failing to pay for insurance coverage after
the improper terminations. Relying on Merten, 508 U.S.
at 256, the First Circuit held that this relief was not
available under § 1132(a)(3). 276 F.3d at 27-29.

By her later motion for reconsideration (Doc. No. 198),
Geissal has directed the court's attention to several
other reported opinions, including Great-West Life &
Annuity Ins. Co. v. Knudson, 122 S. Ct. 708 (2002).
Geissal invokes the statement in Knudson that by its
enactment of ERISA

Congress authorized "a participant or beneficiary" to
bring a civil action "to enforce his rights under the
terms of the plan," without reference to whether the
relief sought is legal or equitable. 29 U.S.C. § 1182
(a)(1)(B)(1994 ed.).

122 S. Ct. at 718. This court held, however, that after
James Geissal died, benefits under the plan were no
longer recoverable under 29 U.S.C. § 1132(a)(1), citing
Turner v. Fallon Community Health Plan, 127 F.3d 196,
198 (1st Cir.1997), cert. denied, 523 U.S. 1072 (1998);
Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1010

26a

(9th Cir. 1998), cert. denied, 528 U.S. 870 (1999); and
Foster v. Blue Cross and Blue Shield of Michigan, 969
F. Supp. 1020, 1029 (E.D. Mich. 1997). Plaintiff Bonnie
L. Geissal, even as the representative of James
Geissal's estate, is not a participant or beneficiary of the
Moore plan and thus is not able to sue for plan benefits
under § 1132(a)(1)(B). LaRocca, 276 F.3d at 332.

Geissal urges the court to follow McGee v. Funderburg,
17 F.3d 1122 (8th Cir. 1994), by holding that unpaid,
covered medical expenses may be recovered by the
widow of a beneficiary. McGee dealt only with whether
the COBRA coverage was wrongfully terminated
because he was covered by another health plan. The
court therein did not at all discuss the survivability of a
beneficiary's past due benefits, which is the issue
Geissal is asking the court to revisit.

Geissal directs the court's attention to Harrow v.
Prudential. Ins. Co. of Am., 279 F.3 d 244 (3 Cir. 2002).
Therein, following the death of the original plaintiff and
plan beneficiary, his surviving wife and administratrix
of his estate, sought in part to recover an unpaid,
covered medical expense. Before affirming the
dismissal of the action for plaintiff's failure to exhaust
administrative remedies, the Third Circuit Court of
Appeals, without extended discussion, ruled that the
decedent's claims under ERISA survived his death and
may be pursued by his widow. 279 F.3d at 248. This
court, however, continues to be persuaded by the
contrary holding of the First Circuit in Turner, supra,
that plan benefits are no longer available after the
death of the beneficiary. See also LaRocca, 276 F.3d at
32; Foster, 969 F’. Supp. at 1029.

27a

Looking alternatively to 29 U.S. C. § 1132(a)(8) for the
recovery of unpaid plan benefits as equitable
restitution, Geissal invokes the treatment of equitable
relief by the Supreme Court its Knudson, supra, Rather
than undermining the authority of Mertens, 508 U.S. at
256-58, Knudson reaffirms it. In Knudson, the Supreme
Court held that "other appropriate equitable relief"
available under § 1132(a)(3) refers only "'to those
categories of relief that were typically available in
equity ...."" 122 S. Ct. at 712 (quoting Mertens, 508
U.S. at 256). This is not a case, as Geissal argues, of
Moore acquiring legal title to property, including
money, under circumstances which render it
unconscientious for Moore to retain the money. Id. at
715-16. Here Gissal seeks specific performance of an
alleged past due monetary obligation, relief that was
not typically available in equity. See id. at 718.

Other cases cited byGissal are inapposite. Harris Trust
and Savings Bank v. Solomon Smith Barney Inc., 530
U.S. 238 (2000) (suit brought under 29 U.S.C. § 1132
(a)(3) against a nonfiduciary party in interest based on a
transaction prohibited by ERISA); Kerr v. Charles F.
Vatterott & Co., 184 F.3d 938 (8 Cir. 1999) (lost
investment opportunity consequential damages are
compensatory damages not available for a breach of
fiduciary duties); and Kwatcher v. Mass. Serv.
Employees' Pension Fund, 879 F.2d 957, 967 (1*
Cir.1989)(involved in vart a claim for the return of
mistaken payments 2! retirement fund contributions).

The court stands by its earlier grant of summary
judgment to Moore on Geissal's Count I claim for
monetary damages.

28a
PLAINTIFF'S MOTION FOR PENALTIES

Plaintiff Geissal seeks penalties under ERISA, 29
U.S.C. § 1132(¢)(1)(A), which provides r

Any administrator who failed to meet the requirements
of paragraph (1) or (4) of § 606 [to provide written
notice of COBRA rights] . . . may in the court's
discretion be personally liable to such participant or
beneficiary in the amount of up to$100 a day from the
date of such failure ....

See 29 U.S.C. § 1132 (c) (1)(A). Geissal argues that
Moore is subject to penalties, because it wrongly
revoked the COBRA notice and never reissued a
proper notice. She also argues that the COBRA notice
was defective for not advising James of his right to an
additional 11 month continuation period, because he
was disabled. She also asserts that penalties are
warranted, because Moore did not change its COBRA
notice to other employees covered by other group
insurance plans at the time of their COBRA election.
Geissal seeks penalties of $100 per day for the 706 days
from James's termination until his death, or "until the
present time or until the time defendants establish
correction of their COBRA notices." See Memorandum
in support of motion for penalties at 8.

The court concludes that this is not a proper case for
penalties under § 1132(c)(1)(A). Moore's revocation of
the initial notice it issued James Geissal was based on a
reasonable interpretation of the law as it stood at that
time. The Supreme Court ultimately held that the
initial notice was correct. The court does not believe it
would be equitable to impose a penalty now for

29a

revocation of that notice; the matter was fairly litigated
in good faith by the parties. Nor does the court believe
that Moore should pay Geissal penalties based on
Moore’s allegedly improper COBRA notice to other
plan beneficiaries.

Therefore, the motion for the imposition of penalties is
denied.

PLAINTIFF’S MOTION FOR ATTORNEYS' FEFS,
COSTS AND EXPENSES

Geissal seeks substantial attorneys' fees, plus costs and
expenses, as the prevailing party in this action. Geissal
has submitted documentation for hours worked and
hourly rates, as follows:

Sheldon Weinhaus
(lead counsel):

Jerome Dobson: $225-$250/hr. x 29.75 hrs.

$355-$500/hr. x 1,237.03 hrs.

Jonathan Berns: $175/hr. x 52.58 hrs.
Gregory Rich: $125lhr. x 6.17 hrs.
Scott Holwitt: $1251hr. x 4,34 hrs.
prlenm $75/hr. x 17.6 hrs.
Mark Moreland: 2.42 hrs.
Robin Thebeau: 3.50 hrs.
Paula Weinman: 1.65 hrs.

Carol Bewig: A2 hrs.

30a

The amounts claimed for Washington, D. C., counsel
hired to aid with the Supreme Court portion of the case
are as follows:

January 29, 1998 through August 20, 1998 (Exhibit 1)

Mare

Greidinger $275/hr. x 280.52hrs. = $77,143.00
David

F. Phillips :

Gilliam $210/hr. x 4.10hrs. = $861.00
James

Winn $85/hr. x 24.75hrs. = $2,103.75
=i $75/hr. x 10.00hrs. = $750.00
Drummy

Pai $95/hr. x 16.00hrs. = $1,056.00
Campo

October 20, 2000, through August 28, 2001 (Exhibit 2)

= $230/hr. x 140.55hrs. = $32,326.50
Geissal has also submitted documentary support for the
opinion that attorney Weinhaus is a highly regarded
expert in ERISA law and should be compensated at a
rate not less than that of senior partners in law firms in
the St. Louis metropolitan area.

Geissal also has documented total expenses in the
amount of $31,534.04, of which Moore has paid
$2,808.24. She now seeks the remaining $28,725.85.

dla
Prevailing party

Moore argues that Geissal is not entitled to attorneys’
fees, because she did not obtain any direct benefit as a
result of this litigation. Geissal maintains that the root
of the action was the question of an employer's
obligation to provide COBRA coverage to a terminated
employee who was covered under his spouse's group
plan at the time of termination. She asserts that this
suit served as a catalyst for a change in the law which
will benefit many employees. Geissal argues that the
fact that the Supreme Court awarded her costs
establishes that she is the prevailing party. Geissal also
argues that she is entitled to fees under the five-factor
analysis, discussed below, for determining entitlement
to attorneys' fees in an ERISA action.

ERISA section 502 (g)( 1) provides that "[i]n any action
under this subchapter [other than an exception not
relevant here] by a participant, beneficiary, or
fiduciary, the court in its discretion may allow
reasonable attorney's fee and costs of action to either
party." 29 U.S.C. § 1132(g)(1). The statute does not
state that fees may be awarded only to a prevailing
party, and there is a split of judicial authority on this
issue. The Eighth and the First Circuits appear to
assume that only a prevailing party may recover
attorneys' fees under ERISA's fee-shifting provision.
See, e.g., Brown v. Seitz Foods, Inc. Disability. Benefit
Plan, 140 F.3d 1198, 1201 (8th Cir. 1998); Cottrill v.
Sparrow, Johnson & Ursilo, Inc., 100 F.3d 220, 225 (1st
Cir.1996).

The Fourth, Seventh, and Ninth Circuits expressly
have held that only a prevailing party may be

32a

considered for attorneys' fees in an ERISA action. See
Quinn v.. Blue Cross & Blue Shield Ass’n, 161 F.3d 472,
478 (7th Cir. 1998); Martin v. Blue Cross Blue Shield of
Va.. Inc., 115 F.3d 1201, 1210 (4th Cir.)(collecting cases),
cert. denied, 522 U.S. 1029 (1997); Flanagan v. Inland
Empire Elec. Workers Pension Plan & Trust, 3 F.3d
1246, 1253 (9th Cir. 1993) ("Plaintiffs cannot recover
fees under section 1132(g)(1) until they succeed on
[some] significant issue in litigation which achieves
some of the benefit .. . sought in bringing the suit"). On
the other hand, the Fifth Circuit recently reached the
opposite conclusion in Gibbs v. Gibbs, 210 F.3d 491, 501-
03 (5th Cir. 2000)(collecting cases and holding that a
party need not prevail to be eligible for an award of
attorneys’ fees under § 1132(g¢)(1)).

Especially in light of the earlier Eighth Circuit
precedent, this court believes that the better view is
that a party must be considered a prevailing party for
entitlement to fees in an ERISA action. See Brown, 140
F.3d at 1201.

To assess the parties' arguments over whether Geissal
is a prevailing party in this action for fee-shifting
purposes, the court must look beyond the general
principle that, for purposes of federal fee-shifting
statutes, a prevailing party is one xvho receives a
judgment on the merits. Buckhannon Bd. & Care Home
v. West Va. Dep't of Health & Human Res., 532 U.S.
598, 604 (2001). Here plaintiff seeks attorneys fees for
litigating both successful and unsuccessful claims.

The court rejects Moore's argument that, because
Geissal ultimately did not recover any monetary
damages, she is not a prevailing party and is entitled to

33a

no fees at all. Although she did not prevail on her claim
for monetary damages, penalties, or "other equitable
relief," Geissal prevailed on a significant aspect of this
case -- she obtained a favorable ruling from the United
States Supreme Court that Moore's basis for denying
Geissal benefits was invalid, and judgment on the
merits of that claim was entered in her favor in this
court on March 23, 1999. This was a judgment that
"materially altered [Moore's] policy limiting the rights
[of its employees]." Texas State Teachers Ass’n v.
Garland Indep. School Dist., 489 U.S. 782, 793 (1989).
The Supreme Court's ruling in this case immediately
altered the specific legal relationship between Geissal
and Moore; absent other considerations, which proved
to be determinative, Moore was held to have wrongly
terminated James Geissal's continuing health insurance
coverage. Jenkins v. State of Missouri, 127 F.3d 709, 713
(8th Cir. 1997).

The court concludes that plaintiff Geissal is a prevailing
party in this action for fee-shifting purposes. The court
also concludes that she is entitled to fee-shifting
consideration under 29 U.S.C. § 1132(g)(1).

In Landro v. Glendenning Motorways, Inc., 625 F.2d
1344 (8 Cir. 1980), the Eighth Circuit held that a
prevailing plan participant “should ordinarily recover
an attorney's fee unless special circumstances would
render such an award unjust.” Id. at 1356. Several
years later, the Eighth Circuit set forth five factors a
court should consider in deciding whether to award fees
to a prevailing party in an ERISA case:

(1) the degree of the opposing parties’ culpability or bad
faith; (2) the ability of the opposing parties to satisfy an

ee

34a

award of attorneys' fees; (8) whether an award of
attorneys' fees against the opposing parties could deter
other persons acting under similar circumstances; (4)
whether the parties requesting attorneys’ fees sought
to benefit all participants and beneficiaries of an
ERISA plan or to resolve significant legal question
regarding ERISA itself; and (5) the relative merits of
the parties' positions.

Lawrence v. Westerhaus, 749 F. 2d 494, 495-96 (8th Cir.
1984); see also Dodson v. Woodmen of the World Life
Ins. Soc’y, 109 F.3d 486, 440 (8th Cir. 1997).

In Martin v. Arkansas Blue Cross Blue Shield, 270 F.3d
673 (8th Cir. 2001) (per curiam), a panel held that
"merely finding that the live factors favor the’ plan does
not amount to special circumstances that would make
are award unjust." Id. at 676 (reversing the denial of
fees to a prevailing ERISA plaintiff where the district
court failed to consider the Landro presumption in
favor of awarding fees to a prevailing plaintiff absent
special circumstances). This decision has been vacated
and submitted to the Eighth Circuit en banc. Oral
argument was held on January 15, 2002, and to date, no
decision has been. issued. Thus, the continued validity
of the five-factor test, as well as of the Landron
presumption, are under consideration.

Under the Lawrence v. Westerhaus factors, the court
concludes that Geissal generally is entitled to an award
of attorneys' fees. The first of the factors does not call
for an award of fees. The court does not discern in this
case "culpability or bad faith" on the part of Moore.
However, the remaining four factors support an award.
On the second factor, Moore has not factually

—

35a

contradicted Geissal's argument that it is able to
satisfy a reasonable fee award; the court recollects no
information during this litigation that Moore is in any
way insolvent. On the third factor, an award of
reasonable attorneys' fees would likely have a
deterrent effect upon plans incorrectly denying
benefits. Regarding the fourth factor, this litigation
resolved a significant legal question regarding ERISA
itself; the Supreme Court's ruling in this case will
benefit a wide class of ERISA plan beneficiaries.
Regarding the fifth factor, the relative merits of the
parties' positions were close, until the Supreme Court
resolved a split in the circuits. Then, as noted above,
Geissal ultimately prevailed on the question of whether
Moore's basis for denying Geissal benefits was valid.

On balance, primarily because Geissal prevailed before
the Supreme Court on a significant issue, she is a
prevailing party entitled to reasonable counsel's fees
and expenses. It remain for the court to determine
what fee is "reasonable." Hensley, 461 U.S. at 433.

Lodestar method

The lodestar method is applicable to calculating
reasonable attorney's fees in this action. See
Emmenegger v Bull Moose Tube Co., 33 F. Supp. 2d
1127, 1188 (E.D.Mo. 1998), aff'd, 197 F.3d 929 (8th
Cir.1998); see also City of Burlington v. Dague, 505 U.S.
557, 562 (1.992)(in applying various federal fee-shifting
statutes, there is a "strong presumption" that the
lodestar represents the "reasonable fee"); Van Gerwen
v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9" Cir,
2000) (the lodestar approach is the proper method for
determining attorneys' fees in an ERISA case).

Da recat PW Ne SL rR Bae SURE anes EN IR Tab gy BRS ue we

36a

In the lodestar method, the court first determines the
lodestar amount by multiplying the number of hours
reasonably expended on the litigation by reasonable
hourly rates. Hensley, 461 U.S. at 433. The party
seeking an award of fees must submit evidence
supporting the hours worked and the rates claimed. Id.
The court should exclude from the lodestar amount
hours that are not reasonably expended because they

are "excessive, redundant, or otherwise unnecessary."
Id. at 434.

Reasonable hours

Attorney Weinhaus seeks compensation far 1,237.03
hours representing plaintiff in this action.

Non - legal, clerical work

Moore points out instances in which it argues that
attorney Weinhaus performed non-legal, clerical work
during the relevant time period. See Exhibit 4 to Defs'
Memorandum (Doc. No. 183), filed November 13, 2001.
Clerical work by counsel is not recoverable as an
attorney's fee. Emmenegger, 33 F. Supp. 2d at 1138.
The court has studied these record entries and agrees
with Moore only with respect to the entries set out in
Appendix A to this opinion. These entries total 31.33
hours.

The remaining entries record work that appears to
have been substantially attorney work in nature,
although it may have included incidental, office
administrative or support work. It is now common for
attorneys themselves reasonably to use _ office
automation equipment to perform tasks which might

37a

have been assigned to secretaries and support staff.
When the evidence indicates that, for a given billing
entry the work performed was substantially attorney
work, the entry ought to be compensable fully as such,
even though incidental, apparently clerical work also
was performed by the attorney. Where the entry
indicates that the work performed by the attorney was
largely clerical, even though in support of an attorney
work-product effort, it ought not be compensable at an
attorney's rate. The facts of each case will differ.

Paralegal — type work

Moore argues that on other occasions, attorney
Weinhaus performed paralegal-type work for which he
should not be compensated at an attorney's rate. See
Exhibit 5 to Defs' Memorandum (Doc. No. 183), fled
November 138, 2001. The court has studied these record
entries and agrees with Moore only with respect to the
entries set out on Appendix B to this opinion. These
entries total 17.60 hours.

These entries were for work that did not require
licensed attorney expertise and ought not be
compensated at such a rate. The court concludes that a
reasonable fee-shifting rate for the paralegal-type work
performed by attorney Weinhaus is one-half the
reasonable attorney's rate for him determined by the
court below.

Duplicative attorney work
Moore argues further that Geissal is claiming instances

in which more than one attorney worked together on
the same matter. The court generally agrees that the

38a

cost of duplicative attorney effort ought not be shifted
to the .non-prevailing party. See Emmenegger, 33 F.
Supp. 2d at 1139. However, attorney conferences and
the exchange of ideas can reduce unproductive effort.
Id. Moore applies this argument to the work of St.
Louis attorney Jerome Dobson, a partner of Mr.
Weinhaus, and Washington attorney Marc Greidinger,°
who prepared the briefs submitted to the Supreme
Court. Moore characterizes their efforts as merely
duplicative of Mr. Weinhaus's work. After carefully
reviewing the entries identified by Moore, the court
disagrees with Moore and finds that the indicated
conferencing is recoverable. Such work has not been
shown to have been merely duplicative.

The preparation of briefs before the Supreme Court is
sufficiently specialized in nature to warrant fee-shifting
compensation. Therefore, even though attorney
Weinhaus was qualified to draft and file the required
briefs alone, but did not, the court will authorize the
shifting to Moore of attorney Greidinger’s billing.

Non - legal, supportive efforts

Moore argues that Geissal claims attorney time spent
investigating the availability of others to participate in
or to confer with in the litigation and in performing
non-attorney work such as conferring with the estate of
the original plaintiff about the retention of counsel. See
Exhibit 7 to Defs' Memorandum (Doc. No. 183), filed
November 13, 2001. Such administrative work is non-
legal in nature and, while possibly necessary to the
financial or other support of the litigation, ought not be
a fee shifted to the defendants. Upon review of this
record, the court agrees with Moore with respect to the

39a

following entries which are set out in Appendix C to
this opinion. These hours total 76.66.

In sum, upon careful consideration, the court concludes
that Geissal is entitled to the attorney time claimed,
except that described in Appendix C.

Reasonable rates

The court has carefully studied the documentary
evidence submitted by Geissal and Moore regarding
reasonable rates. Given Mr. Weinhaus's substantial
expertise in ERISA beneficiary matters, the court will
award him a rate of $ 250 per hour for his work in this
action. From the same record, the court awards
attorney Dobson a reasonable rate of $200 per hour. See
Exhibits 9 and 10 to Affidavit of Plaintiff's Lead
“Counsel, filed July 31, 2001. The court also finds that
the rates claimed for attorney Greidinger and the
remaining attorneys and paralegals are reasonable. The
individuals whose rates are not noted by Geissal shall
be compensated at $60 per hour.

Thus, the reasonable numbers of hours of attorney
effort and the reasonable rates for the attorneys and
paralegals are a follow:

Sheldon

Walaiesie $250/hr. x 1111.44hrs. = $277.860.00
Sheldon : i

Weinhaus: $125/hr. xX 17.60 hrs. = $2,200.00
—— $200/hnr. x 29.75hrs. = $5,950.00

Dobson:

40a

— $175/hr. x 52.58hrs. =
ig $195/nr. x G17hra. =
—eKetem $125/hr. x 434hrs. =
Jerry

Rappold $75/hr. x 17.66hrs. =

(paralegal):

en j. 860/hr, x 242hrs, =
Saco $60/hr. x 3.50hrs. =
so ee $60/hr. x 1.65hrs. =
ba a $60/hr. x 42 hrs. :

January 29, 1998, through August 20, 1998

Mare
Greidinger
David
Hominik
F. Phillips
Gilliam
James
Winn
David
Drummy

$275/hr. x 280.52 hrs.

$275/hr. x 4.20 hrs.

$210/hr. x 4.10hrs.

$85/hr. x 24.75hrs.

$75/hr. x 10.00 hrs.

$9,201.50
$771.25

$542.50

$1,324.50

$145.20
$210.00
$99.00

$25.20
$298,329.15

$77,143.00
$1,155.00
$861.00
$2,103.75

$750.00

4la

Robin

Campo $95/hr. x 16.00hrs. = $1,056.00

$83,068.00

October 20, 2000, through August 28, 2001

Mare

Greidinger $230/hr. x 140.55hrs. = $32,326.50
TOTAL ATTORNEY®Y’ FEES = $413,723.65

COSTS AND EXPENSES

In the application of Federal Rule of Civil procedure
54(d), which authorizes the award of costs to a
prevailing party, the court must carefully scrutinize the
claimed costs and the support offered for them. Farmer
v. Arabian Am. Oil Co., 379 U.S. 227, 232-33, 235 (1964);
Koppinger v. Cullen-Schultz & Assoc., 518 F.2d 901, 911
(8* Cir.1975). Generally, in a civil action only those
items of costs authorized by 28 U.S.C. § 1920° may be
taxed by the court. Crawford Fitting Co. v. J.T.
Gibbons, Inc., 482 U.S. 437, 444-45 (1987). The same
definition of costs applies to both § 1920 and to ERISA
(29 U.S.C. § 1132(g)). Emmenegger, 33 F. Supp. 2d at
1132.

In the application of a fee-shifting statute, however, "a
reasonable attorney's fee" includes the factors that
produce the attorney's work product, including

the work not only of attorneys, but also of secretaries,
messengers, librarians, janitors, and others whose labor
contributes to the work product for which an attorney

42a

bills her client; and it must also take account of other
expenses and profit.

Id. at 1133 (quoting Missouri v. Jenkins, 491 U.S. 274,
285 1989)). The reasonable attorney’s fee “must include
‘reasonable out-of-pocket expenses of the kind normally
charged to clients by attorneys.” Id. (citing Pinkham v.
Camex, Inc., 84 F.3d 292, 294-95 (8th Cir.1996)). Such,
expenses can include long distance telephone calls,
facsimile transmissions, messenger services, express
mail, deposition related travel expenses, photocopying
expenses, and court reporter fees for transcripts. Id. at
1133-36 (collecting cases).

Moore objects to the following costs and expenses
claimed by Geissal:

(a) long-distance telephone calls, Federal Express and
local delivery services, miscellaneous office expenses,
PACER automated internet information gathering, and
postage. See Exhibit 11, attached to Defs'
Memorandum (Doc. No. 183), filed November 13, 2401;

(b) $226.87 expended by attorney Greidingr for Federal
Express charges, postage, mileage, and telephone calls.
See Exhibit 12, attached to Defs' Memorandum (Doc.
No. 183), filed November 13, 2001; and

(c) $1,367.64 for WestLaw computer assisted legal
research. See Exhibit 11, attached to Defs'
Memorandum (Doc. No. 188), filed November 18, 2001.

The court disagrees with Moore regarding (a) and (b).
Although they are not recoverable costs under 28
U.S.C. § 1920, see Hollenbeck v. Falstaf, Brewing

43a

Corp., 605 F. Supp. 421, 439 (E.D. Mo. 1984), aff'd 780
F.2d 20 (8th Cir. 1985), these are expenses that are
attorney would be expected to bill to his client
separately, and as such may be shifted to Moore under
29 U.S.C. 1132(g)(1). See Emmenegger, 33 F. Supp. 2d
at 1133; ef., Emery v. Hunt, 272 F.3d 1042, 1048 (8 Cir.
2001). However, the cost of computer assisted legal
research, must be borne by the attorney's fee rate and
may not be separately shifted to the defendants either
as a recoverable cost of litigation, Leftwich v. Harris-
Stowe State College, 702 F.2d 686, 695 (8th Cir.1983)
(costs for computer-aided research are not covered
under § 1920), or as an expense shifted under §
1132(g)(1). Emmenegger, 33 F. Supp. 2d at 1136-37; U
& I Sanitation, 112 F. Supp. 2d 902, 905-06 (D. Neb.
2000); see also, Montgomery v. Aetna Plywood, Inc.,
231 F.3d 399, 409-10 (7th Cir. 2000).

Expert witness fee

The court sustains Moore's objection to a $1,000 expert
witness fee paid to Jack B. Helitzer on August 20,1998.
See Exhibit 11, attached to Defs' Memorandum (Doc.
No. 183), filed November 13, 2001. The fees of expert
witnesses are not recoverable as costs, other than as
are the fees of ordinary witnesses. Only the statutory
witness fees, per diem, and transportation costs of
witnesses are recoverable. 28 U.S.C. §§ 1920(3),
1821(b); see Crawford Fitting Co., 482 U.S. at 445;
Pinkham, 84 F.3d at 295. Nor may the fees of expert
witnesses be shifted under 29 U.S.C. § 1132(g)(1).
Emmnegger, 33 F. Supp. 2d at 1136.

44a
Payments to retained counsel

Geissal seeks to recover a total of $5,000 paid to
attorney Greidinger on November 6, 2000, and
February 27, 2001. See Exhibit 11, attached to Defs'
Memorandum (Doc. No. 183), filed November 13, 2001.
Moore argues that such payments are not recoverable
under 28 U.S.C. § 1920. The court agrees. Such costs
appear from the record to be items included in an
attorney's overhead, which is _ not _ separately
recoverable.

The remaining claimed’ costs and expenses are taxable
and reasonable, and shall be paid by Moore. The
recoverable costs and expenses total $21,015.75.

All tolled, the court determines the lodestar amount to
be $434,739.40.

The lodestar amount is presumptively the reasonable
fee, and a court may adjust it upward or downward,
only upon specific evidence on the record and detailed
findings that the lodestar amount is unreasonably low
or unreasonably high. Pennsylvania v. Delaware Valley
Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986).

Adjustment of lodestar

In the second step of the lodestar method of
determining attorneys’ fees, the court may adjust the
lodestar upward or downward based on factors not
subsumed in the initial calculation of the lodestar. Blum
v. Stenson, 465 U.S. 886, 898-901(1984). Specifically, the
court may look at the results obtained. Hensley v.
Eckerhart, 461 U.S. 424, 440 (1983) ("A reduced fee;

—

45a

award is appropriate if the relief, however significant,
is limited in comparison to the scope of the litigation as
a whole"); 10 see also Jenkins, 127 F.3d a 716 ("If the
plaintiff's success is limited, he is entitled only to an
amount of fees that is reasonable in relation to the
results obtained").

In this case, plaintiff has prevailed only on the Count I
claim that Moore violated COBRA by failing to provide
James Geissal with continuation health insurance. The
sole relief received by plaintiff is the declaration of
rights by the Supreme Court. Plaintiff has been
determined not to be entitled to any monetary
recovery. Counts II and III were dismissed as moot.
And the court has determined that Geissal is not
entitled to penalties under Count IV.

The cardinal issue presented is whether the relief
awarded under Count I merits a fee-shifting of the
attorney effort on the unsuccessful portion of Count I
and on Counts II, III, and IV. Because of its seminal
relevance, the Supreme Court's early pronouncement in
this area is restated:

The congressional intent to limit awards to prevailing
parties requires that these unrelated claims be treated
as if they had been raised in separate lawsuits, and
therefore no fee may be awarded for services on the
unsuccessful claim.

It may well be that cases involving such unrelated
claims are unlikely to arise with great frequency. Many
civil rights cases will present only a single claim. In
other cases the Plaintiff's claims for relief will involve a
common core of facts or will be based on related legal

46a

theories. Much of counsel's time will be devoted
generally to the litigation as a whole, making it difficult
to divide the hours expended on a claim-by-claim basis.
Such a lawsuit cannot be viewed as a series of discrete
claims. Instead the district court should focus on the
significance of the overall relief obtained by the plaintiff
in relation to the hours reasonably expended on the
litigation.

Where a plaintiff has obtained excellent results his
attorney should recover a fully compensatory fee.
Normally this will encompass all hours reasonably
expended on the litigation, and indeed in some cases of
exceptional success an enhanced award may be
justified. In these circumstances the fee award should
not be reduced simply because the plaintiff failed to
prevail on every contention raised in the lawsuit.
Litigants in good faith my raise alternative legal
grounds for a desired outcome, and the courts rejection
of or failure to reach certain grounds is not a sufficient
reason for reducing a fee. The result is what matters.

If, on the other hand, a plaintiff has achieved only
partial or limited success, the product of hours
reasonably expended on the litigation as a whole times
a reasonable hourly rate may be an excessive amount.
This will be true even where the plaintiff's claims were
interrelated, nonfrivolous, and raised in good faith.
Congress has not authorized an award of fees whenever
it was reasonable for a plaintiff to bring a lawsuit or
whenever conscientious counsel tried the case with
devotion and skill. Again, the most critical factor is the
degree of success obtained.

47a

Hensley, 461 U.S. at 435-36 (internal citation and
footnotes omitted).

This is not a case such as Emery, 272 F.3d 1042, in
which plaintiffs obtained some ultimate relief on an
successful state law claim but not an the alternative
federal law claim for the same relief. 272 F.3d at 1047.
In that case, the prevailing plaintiffs were entitled to
shift their attorneys' fees for their work on the
unsuccessful federal claim. Id.

Considering the degree of success obtained, Geissal's
case may be likened to one where the plaintiff won a
judgment of liability, but lost on the past judgment
remedy efforts. E.g., Jenkins, 127 F.3d 709; Association
for Retarded Citizens of N. Dak. v. Schafer, 83 F.3d
1008 (8th Cir. 1996), cert. denied, 519 U.S. 993 (1996). In
such a case, the court should determine whether
Geissal's efforts toward a monetary recovery are
"inextricably intertwined with" or are distinct from the
efforts which achieved the judgment of liability.
Clearly, both efforts were based on the same federal
statutes and arose out of a generally common set of
facts that included James Geissal's employment with
Moore, the notice and actions of Moore, James'
entitlement to continuation coverage, and his medical
expenses. Nevertheless, the court must still consider
that out of all the litigation in this action, Geissal's
victory was early on and entirely declaratory; all
subsequent efforts to derive a personal, monetary
benefit were unsuccessful. For the purpose of fee-
shifting, this last factor “certainly [changes] the overall
significance of the plaintiffs victory.” Jenkins, 127 F.3d
at 718.

48a

This is like a case where the plaintiff achieved one
victory and then expended entirely unsuccessful efforts
not to defend the victory but to achieve a greater
victory. In such a case the plaintiff “is entitled to a
proportionately lesser fee award than a prevailing
party who merely defends its victory” unsuccessfully.
Schafer, 83 F.3d at 1012.

Considering that Geissal achieved her sole, limited
victory, by judgment of liability before the Supreme
Court, the appropriate shifted fee is fifty percent of the
lodestar amount, or $217,369.70.

An appropriate order is issued herewith.
Signed this 29" day of March, 2002.

DAVID D. NOCE
UNITED STATES MAGISTRATE JUDGE

APPPENDIX A

DATE HOURS DATE HOURS DATE HOURS
02.01.95 58 T1798 25 12.28.98 Oo
02.02.95 .25 07.21.98 2.00 01.16.99 st3)
06.18.96 2.83 09.22.98 .25 03.25.99 mi
08.19.96 142 10.01.98 .25 04.06.99 00
07.31.97 .25 10.12.98 42 04.21.99 08

02.18.98 .25
04.22.98 1.00
05.01.98 3.83
05.02.98 .25
05.15.98 1.50
06.10.98 1.00
06.19.98 .17
APPENDIX B
DATE HOURS
10.25.94 4.00
07.11.95 .25
09.16.96 .25
11.01.96 .58

49a

11.02.98

11.03.98

11.03.98

11.06.98

11.10.98

11.24.98

12.09.98

1.00

17

05.03.99
05.12.99
05.20.99
09.15.00

02.18.01

TOTAL
HOURS

DATE HOURS DATE

10.05.97 2.08

10.09.97 2.00

10.10.97 2.50

10.14.97 2.50

09.22.98

10.12.98

11.10.98

11.24.98

TOTAL
HOURS

1.00
1.00
A2
.20

6.00

31.33

HOURS
25
42
58

1.75

17.16

APPENDIX C

DATE HOURS DATE HOURS

07.26.95

08.19.95

08.31.95

09.01.95

09.12.95

09.15.95

09.16.95

10.26.95

10.27.95

03.20.96

06.13.97

06.14.97

07.02.97

07.10.97

.20

3d

0

1.00

50a

~

09.15.97

09.23.97

10.17.97

11.03.97

11.10.97

11.14.97

11.26.97

12.11.97

01.20.98

01.27.98

02.03.98

02.07.98

02.09.98

02.11.98

3.00

1.50

2.00

ts)

2.00

Oo

1.25

RI)

A2

83

DATE HOURS

02.25.98

02.27.98

03.03.98

03.18.98

03.23.98

03.24.98

04.03.98

04.10.98

04.11.98

04.14.98

04.15.98

05.01.98

06.08.98

06.09.98

2.00

4.00

5.67

3.83

1.00

1.00

5la

09.05.97 42 02.16.98 .58 08.20.98 6.75
08.21.98 1.75 11.09.98 42 11.09.98 42

12.24.98 33 04.21.99 50 04.21.99 33

TOTAL
HouRS “6-66

FOOTNOTES

' That subsection provides that are employer may
cancel COBRA continuation coverage as of "[t] the date
on which the qualified beneficiary first becomes, after
the date of the election . . . covered under any other
group health plan (as an employee or otherwise)... ."
See 29 U.C:S. § 1162(2)(D)(i) .

* Geissal did not seek reimbursement from TWA/Aetna
for expenses he incurred on a trip to Greece to obtain
immunotherapy in a last effort to cure his cancer.

° This section provides that a participant or beneficiary
may bring a civil suit "(A) to enjoin any act or practice
which violates any provision of this subchapter or the
terms of the plan, or (B) to obtain other appropriate
equitable relief (i) to redress such violation or (ii) to
enforce any provisions of this subchapter or the terms o
the plan." See 29 U.S.C. § 1132(a)(8).

* This section provides that a participant or beneficiary
may bring a civil suit "to recover benefits due to him |
under the terms of his plan, to enforce his rights under
the terms of the plan, or to clarify his rights to future

52a

benefits under the terns of the plan." See 29 U.S.C. §
1132(a)(1)(B).

° TW A/Aetna covered much of Geissal's expenses.

6 The court notes that the written affidavit submitted
by attorney Greidinger was inadvertently not signed.

” Reduced rate far ton-legal work. See supra.

* This section allows for the recovery of the following
costs:

(1) Fee of the clerk and marshal;

(2) Fees of the court reporter for all or any part of
the stenographic transcript necessarily obtained for use
in the case;

(3) Fees and disbursements for printing and
witnesses;

(4) Fees for exemplification and copies of papers
necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts,
compensation of interpreters, and salaries, fees,
expenses, and costs of special interpretation services.

° Geissal agrees with Moore that $342.46 relating to a
bankruptcy proceeding in Kentucky are _ not
compensable costs, they having been inadvertently
included in her claim.

' The original 12 Hensley factors were: (1) the time
and labor required; (2) the novelty and difficulty of the
questions; (3) the skill requisite to perform the legal
service properly; (4) the preclusion of employment by

53a

the attorney due to acceptance of the case; (5) the
customary fee; (6) whether the fee is fixed or
contingent; (7) time limitations imposed by the client or
the circumstances; (8) the amount involved and the
results obtained; (9) the experience, reputation, and
ability of the attorneys; (10) the "undesirability" of the
case; (11) the nature and length of the professional
relationship with the client; and (12) awards in similar
cases. Hensley, 461 U.S. at 430 n.3.

These factors were subsequently refined by the
Supreme Court in Blum v. Stenson. 465 U.S. 886, 898-
901(1984) (novelty or complexity of the issues should
not be considered at the second step, and quality of
representation and results obtained are ordinarily
subsumed in the lodestar determination and in most
cases should not be considered in the second step), and
City of Burlington v. Dague, 505 U.S. 557, 566-67.(1992)
(contingency nature of a fee cannot be considered as a
factor bearing on the amount of attorney’s fees).

54a
NO. 4:94 CV 1263 DDN

UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF MISSOURI,
EASTERN DIVISION

BONNIE L. GEISSAL,
Plaintiff,

V.

MOORE MEDICAL CORP., GROUP BENEFIT
PLAN OF MOORE MEDICAL CORP., AND
HERBERT WALTER nl,
Defendants.

March 29, 2001, Decided
March 29, 2001, Filed

COUNSEL: For MOORE MEDICAL CORP.,
defendant: Daniel J. Schwartz, GREENSFELDER
AND HEMKER, St. Louis, MO.

For GROUP BENEFIT PLAN OF MOORE
MEDICAL CORP., HERBERT WALKER,
defendants: Edward M. Goldenhersh, Vice-President,
Daniel J. Sewartz, GREENSFELDER AND
HEMKER, St. Louis, MO.

For BONNIE L. GEISSAL, plaintiff: S. Sheldon
Weinhaus, Partner, WEINHAUS AND DOBSON, St.
Louis, MO.

JUDGES: David D. Noce, UNITED STATES
MAGISTRATE JUDGE.

55a
OPINIONBY: David D. Noce

OPINION:
MEMORANDUM

This action is before the court upon defendants' motion
for partial summary judgment on Count I of plaintiff's
complaint, specifically on the issue of damages (Doc.
No. 139), and plaintiff's cross-motion for summary
judgment on appropriate equitable relief (Doc. No. 139).
The parties have consented to the exercise of authority
by the undersigned United States Magistrate Judge
pursuant to 28 U.S.C. § 636(c). ;

Plaintiff James Geissal commenced this action in June
1994, alleging four counts under the Employee
Retirement Income Security Act ("ERISA"), amended
by the Comprehensive Omnibus Budget Reconciliation
Act of 1986 ("COBRA"). Defendants are plaintiff's
former employer, Moore Medical Corporation
("Moore"). Group Benefit Plan of Moore Medical
Corporation, and Herbert Walter, the Plan
Administrator.

Plaintiff alleged four counts for relief. Count I alleged
that defendants violated COBRA by failing to provide
him with continuation coverage after Moore terminated
his employment. Count II alleged that Moore was
estopped from denying him COBRA coverage because
plaintiff relied on its initial representation that he was
entitled to COBRA coverage. Count III alleges that
defendants waived any differing construction or
interpretation of plan provisions. Count IV alleges that
Herbert Walter, the Plan Administrator, failed to

56a

provide requested documents in violation of 29 U.S.C. §
1024(b)(4).

Plaintiff hes moved for partial summary judgment. In
March 1996, this court denied plaintiff's motion for

artial summary judgment and sua sponte granted
partial summary judgment for defendants. n2 Geissal v.
Moore Medical Corp., 927 F. Supp. 352, 361 (S.D. Mo.
1996). The Eighth Circuit affirmed on interlocutory
appeal. Geissal v. Medical Corp., 114 F.3d 1458 (8th Cir.
1997). However, the United States Supreme Court
vacated the opinion of the Eighth Circuit and remanded
the case. Geissal v. Moore Medical Corp., 524 U.S. 74,
141 L. Ed. 2d 64, 118 S. Ct. 1869 (1998).

Plaintiff then moved for reconsideration of the courts
ruling on plaintiff's earlier motion for partial summary
judgment. In March 1999, the court granted plaintiffs
motion and determined that defendant Moore Medical
Corporation was obligated to provide COBRA coverage
to James Geissal, but that plaintiff's entitlement to
other relief would have to await the conclusion of any
trial or other factfinding conducted by the court. See
Order and Memorandum, filed March 23, 1999 (Doc. No.
83) . In September 1999, the court ordered the parties
to file cross-motions for partial summary judgment on
certain liability issues. See Order, filed Sept. 23, 1999
(Doe. No. 119).

The Court must grant summary judgment if the
pleadings, admissions, stipulations, depositions and
affidavits demonstrate that no genuine issue of material
fact exists and the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp.
v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct.

57a

2548 (1986); Board of Educ., Island Trees Union Free
School Dist. No. 26 v. Pico, 457 U.S. 853, 863, 73 L. Ed.
2d 435, 102 S. Ct. 2799 (1982) (plurality opinion). The
moving party must initially demonstrate the absence of
an issue for trial. Celotex, 477 U.S. at 323. Any doubt
as to the existence of a matevial fact must be resolved
in favor of the party opposing the motion. Pico, 457
USS. at 863.

Once a motion is properly made and supported, the non-
moving party may not rest upon the allegations in the
pleadings but must instead demonstrate the existence
of admissible evidence of specific facts showing that
there is a genuine issue of material fact for trial. Fed. R.
Civ. P. 56(e); Buford V. Tremayne, 747 F.2d 445, 447
(8th Cir. 1984). Although the court views the facts in
the light most favorable to the non-moving party, "in
order to defeat a motion for summary judgment, the
non-movant cannot simply create a factual dispute;
rather, there must be genuine dispute over those facts
that could actually affect the outcome of the lawsuit."
Webb v. Lawrence County, 144 F.3d 1131, 1135 (8th
Cir. 1998).

For the convenience of the parties, the court will
restate the undisputed facts which the court set forth in
its March 23, 1999 ruling:

"1. On July 16, 1993, Moore Medical Corporation
terminated James Geissal from employment. At the
time of his termination, Geissal was 62 years old and
had cancer. During his employment at Moore, Geissa!
was a participant in a health benefits plan, the Group
Benefit Plan of M

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_0821%3A1. Public record. Not legal advice.