Moral Victories Are Not Merits Victories: The Fifth Circuit Narrows ERISA Fee Awards in Cloud v. NFL Player Retirement Plan

I. Introduction

The Fifth Circuit’s decision in Cloud v. Bert Bell/Pete Rozelle NFL Player Retirement Plan squarely addresses a recurring and often misunderstood question in federal fee-shifting law: can a litigant who ultimately loses the case—but who secures strong, favorable judicial findings and moral vindication—still recover attorney’s fees under a discretionary statute like ERISA’s fee provision, 29 U.S.C. § 1132(g)(1)?

The panel, in an opinion by Judge James Ho, answers that question with a categorical “no.” Even under a broadly worded, discretionary fee statute, a party must obtain actual relief—some concrete “degree of success on the merits”—before a court may award attorney’s fees. Favorable factual findings, judicial criticism of the defendant, or “moral satisfaction” alone do not qualify.

The case arises out of former NFL running back Michael Cloud’s effort to secure the highest tier of disability benefits under the jointly administered Bert Bell/Pete Rozelle NFL Player Retirement Plan. Although the district court initially awarded Cloud both benefits and over $1.2 million in fees, an earlier Fifth Circuit panel reversed the benefits award and directed entry of judgment for the Plan. On remand, the district court nonetheless re-awarded Cloud his fees, reasoning that its scathing factual findings about the Plan’s practices amounted to meaningful relief. In this opinion, the Fifth Circuit reverses that fee award, holding that Cloud’s gain was—at most—a “moral victory,” not a merits victory.

The decision solidifies, within the Fifth Circuit, an important doctrinal proposition: attorney’s fees under ERISA’s discretionary fee provision are unavailable to a party who receives no concrete relief, even if the court concludes that the party was mistreated or that his rights were violated.

II. Factual and Procedural Background

A. Michael Cloud and the NFL Disability Plan

Michael Cloud was a second-round pick in the 1999 NFL Draft and played for the Kansas City Chiefs, New England Patriots, and New York Giants. Like many players in contact-heavy positions, he suffered multiple concussions during his career. Subsequently, he sought disability benefits from the Bert Bell/Pete Rozelle NFL Player Retirement Plan, an ERISA-regulated welfare benefit plan jointly administered by representatives of NFL players and team owners.

The Plan did award Cloud some disability benefits. However, it determined that he did not qualify for the highest category of benefits—a top-tier classification that presumably carried substantially greater monetary value. Cloud contended that this denial was wrongful and that the Plan’s internal review procedures did not afford him the “full and fair review” required under ERISA.

B. The District Court’s Initial Ruling

Cloud filed suit under ERISA in the Northern District of Texas. His core contentions were:

He had been improperly denied the highest tier of disability benefits; and
The Plan failed to provide him with a “full and fair review” of his claim.

The district court sided with Cloud. It:

Ordered the Plan to reclassify Cloud to the top benefits category and pay corresponding benefits; and
Awarded approximately $1.2 million in attorney’s fees, plus $600,000 in conditional (future) fees.

The district court also issued extensive findings of fact criticizing the Plan’s review process, characterizing it as a “disturbing lack of safeguards” and a “lopsided system aggressively stacked against disabled players.”

C. The First Fifth Circuit Appeal on the Merits (Cloud I)

The Plan appealed. In Cloud v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, 95 F.4th 964 (5th Cir. 2024) (“Cloud I”), a Fifth Circuit panel reversed the district court’s judgment on the merits and remanded with instructions to enter judgment in the Plan’s favor.

In Cloud I, the panel made several notable observations:

It acknowledged that “the NFL Plan’s review board may well have denied Cloud a full and fair review.”
It stated that Cloud “probably” was entitled to the highest level of benefits.
Nonetheless, it concluded that Cloud was “not entitled to reclassification to that top tier.”

Why not? Because Cloud failed to timely appeal his benefits denial. As the panel put it, he did not appeal “even though he could have, and indeed should have.” Due to this procedural history, the court concluded that “no amount of additional review can change the fact that Cloud is ineligible for reclassification,” and that remanding for further administrative review would be a “useless formality.”

As a result, the panel directed the district court to enter judgment in favor of the Plan. The practical upshot was stark: Cloud received no benefits, no order for remand to the Plan, no injunctive or declaratory relief—nothing beyond the court’s expressed view that he had been treated unfairly and should have received more favorable treatment earlier.

D. Remand and the District Court’s Fee Award

On remand, the district court accepted that it could no longer award Cloud the top-tier benefits. Nonetheless, it reaffirmed its earlier attorney’s fee award.

The district court characterized the Fifth Circuit’s merits reversal as “narrow” and emphasized that Cloud’s litigation had:

Exposed “the NFL Plan’s disturbing lack of safeguards to ensure fair and meaningful review of disability claims,” and
“Chronicled a lopsided system aggressively stacked against disabled players.”

The court then took a further step: it declared that its “Findings of Fact constitute a declaration” that “vindicate[es] at least some of the relief [Cloud] sought,” and concluded that this was sufficient “success” to justify awarding fees under ERISA’s discretionary fee provision, 29 U.S.C. § 1132(g)(1). It held that the relief was “neither procedural nor trivial” and “goes to the heart of [Cloud’s] case.”

The Plan again appealed—this time challenging only the fee award.

III. Summary of the Fifth Circuit’s Opinion

The Fifth Circuit reverses the district court’s attorney’s fee award.

The central holding is that, under § 1132(g)(1), a court may not award attorney’s fees to a litigant who obtains no concrete relief—no damages, no injunction, no declaratory judgment, no remand that changes the parties’ legal relationship, and no settlement that confers relief.

Applying Supreme Court precedents such as Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983), Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010), and Hewitt v. Helms, 482 U.S. 755 (1987), as well as its own decision in Katherine P. v. Humana Health Plan, Inc., 962 F.3d 841 (5th Cir. 2020), the court reiterates and clarifies several key propositions:

Even under a discretionary fee statute like ERISA § 1132(g)(1), a party must obtain “some degree of success on the merits” to be eligible for fees.
“Moral satisfaction” or favorable factual findings that do not culminate in any form of judicial relief are not “the stuff of which legal victories are made.”
The distinction between “prevailing party” statutes and discretionary statutes affects only the degree of success required, not the baseline requirement that there must be some success.
Favorable intermediate steps—such as reversal of a summary judgment or critical factual findings—are “purely procedural victories” unless and until they lead to an actual change in the parties’ legal relationship.

Because Cloud ultimately “won nothing” from his ERISA suit—no benefits, no order for reprocessing, no declaratory or injunctive relief—the court concludes he is not entitled to any attorney’s fees. The district court’s contrary conclusion, based on its view that Cloud achieved a substantial “moral victory,” is deemed an error of law and therefore an abuse of discretion.

IV. Analysis

A. Statutory Context: Attorney’s Fees Under ERISA § 1132(g)(1)

ERISA’s fee-shifting provision, 29 U.S.C. § 1132(g)(1), states that “the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” On its face, the statute:

Does not use the phrase “prevailing party”; and
Appears to grant broad discretion to award fees to either claimants or plans.

In Hardt, the Supreme Court interpreted this language to mean that a fee claimant need not be a “prevailing party” in the technical sense. However, Hardt also made clear that § 1132(g)(1) is not an open-ended license to award fees to completely unsuccessful litigants. Instead, a party must show “some degree of success on the merits,” which excludes “trivial success on the merits” or a “purely procedural victory.”

This Fifth Circuit opinion takes that framework and applies it to an especially sympathetic but ultimately unsuccessful plaintiff, where the district court sought to treat moral vindication as success. The court’s answer is categorical: moral vindication is not “success on the merits” for purposes of ERISA fees.

B. Precedents Cited and Their Influence

1. Ruckelshaus v. Sierra Club (1983)

In Ruckelshaus, the Supreme Court interpreted the Clean Air Act’s fee provision, 42 U.S.C. § 7607(f), which allows a court to award fees “whenever [it] determines that such award is appropriate.” The Sierra Club argued that this broad language authorized fee awards even to non-prevailing parties if their litigation served the public interest.

The Supreme Court rejected that position and anchored its analysis in the American Rule: each party bears its own attorney’s fees unless Congress clearly says otherwise. From that premise, the Court articulated two key points that the Fifth Circuit imports wholesale into Cloud:

Baseline rule: “A successful party need not pay its unsuccessful adversary’s fees.” And, more sharply, “complete winners need not pay complete losers.”
Discretionary language is about quantum, not the existence of success: When Congress uses more flexible terms (such as “appropriate”) instead of “prevailing party,” it simply expands eligibility from those who prevail outright to those who partially prevail—it does not authorize fees for total losers.

The Fifth Circuit quotes Ruckelshaus to stress that absent a “clear showing” of congressional intent to depart from the American Rule, statutes—even generous discretionary ones—should not be read to require a successful party to pay the fees of an entirely unsuccessful opponent. Finding no such clear intent in ERISA § 1132(g)(1), the court concludes that some measure of success is a prerequisite to any fee award.

2. Hardt v. Reliance Standard Life Ins. Co. (2010)

Hardt is the Supreme Court’s leading decision on ERISA’s fee-shifting provision. The plaintiff in Hardt sought disability benefits and, after litigation, the district court remanded the case to the plan administrator for further consideration while explicitly signaling that the plaintiff was likely entitled to benefits. The plan then awarded benefits on remand.

The Supreme Court held that the plaintiff was eligible for attorney’s fees because she had obtained “some degree of success on the merits.” Importantly, the Court:

Rejected the notion that only a technical “prevailing party” may recover fees under § 1132(g)(1); but
Emphasized that the party must do more than achieve a “trivial success on the merits” or a “purely procedural victory.”

The Fifth Circuit in Cloud embraces Hardt’s threshold requirement—“some degree of success on the merits”—and uses Hardt’s own reliance on Ruckelshaus to clarify that discretionary fee provisions are not meant as “a radical departure” from the baseline rule requiring at least some success.

The Fifth Circuit also draws a conceptual distinction: where the Hardt plaintiff secured a remand that actually led to the award of benefits, Cloud received no comparable form of relief—no remand, no benefits, and no order requiring the Plan to do anything differently in his case. Thus, the Fifth Circuit concludes that Cloud’s situation does not reach the threshold of “some degree of success on the merits” set forth in Hardt.

3. Hewitt v. Helms (1987)

Hewitt involved a prisoner who sued prison officials under 42 U.S.C. § 1983. The district court found that his constitutional rights had been violated, but the case ultimately became moot before any relief—damages, injunctive, or declaratory—was awarded. The prisoner nonetheless sought attorney’s fees as a “prevailing party” under § 1988.

The Supreme Court denied fees, holding that a “prevailing party” must secure some form of actual relief:

“The only ‘relief’ [Helms] received was the moral satisfaction of knowing that a federal court concluded that his rights had been violated.” ... “That is not the stuff of which legal victories are made.”

In Cloud, the Fifth Circuit imports this reasoning and extends its logic beyond “prevailing party” statutes to discretionary fee provisions:

It notes that the difference between § 1988 and ERISA § 1132(g)(1) concerns the quantum of success needed (full vs. partial), not whether success is needed at all.
It reasons that if “moral satisfaction” does not constitute “prevailing” under § 1988, it likewise cannot constitute even “some degree of success” under § 1132(g)(1).

The court thus concludes that Cloud, like Helms, obtained only moral vindication—no damages, no injunction, no declaratory judgment, and no relief via settlement or consent decree. Accordingly, consistent with Hewitt, Cloud is not entitled to attorney’s fees.

4. Katherine P. v. Humana Health Plan, Inc. (5th Cir. 2020)

In Katherine P., the Fifth Circuit considered whether a plaintiff who succeeded in reversing a grant of summary judgment to an ERISA plan—but obtained no further relief—could recover attorney’s fees. The court held she could not, explaining that:

Reversal of summary judgment, standing alone, did not change the parties’ legal relationship;
It did not require the plan to do anything different from what it had already done; and
Under Hardt and Ruckelshaus, such an outcome is a “purely procedural victory” insufficient to support a fee claim.

In Cloud, the Fifth Circuit analogizes Cloud’s position to that of Katherine P. Cloud’s favorable factual findings and the district court’s criticism of the Plan are seen as, at most, intermediate procedural steps that never culminated in actual relief. Like the plaintiff in Katherine P., Cloud ended the litigation with no change in his legal status or in the Plan’s obligations to him.

5. LifeCare and Deepwater Horizon: Standard of Review

The court recites the standard of review for fee awards:

Attorney’s fee awards are reviewed for abuse of discretion.
Factual findings are reviewed for clear error, and legal conclusions are reviewed de novo.
A decision premised on an error of law is, by definition, an abuse of discretion.

Here, because the district court’s award rested on an erroneous legal premise—equating moral vindication with “some degree of success on the merits”—the Fifth Circuit finds an abuse of discretion and reverses.

C. The Court’s Legal Reasoning in Cloud

1. Reaffirming the “Success” Requirement

The court begins by restating the American Rule: each litigant typically bears its own attorney’s fees. Fee-shifting statutes are exceptions, and courts will not expand them beyond their terms absent clear textual indication.

From Ruckelshaus and Hardt, the court extracts these core propositions:

Even where a statute allows fees whenever a court deems it “appropriate” or in its “discretion,” it does not authorize fees to litigants who achieve no success.
The statutory expansion from “prevailing party” language to broader discretionary formulations merely allows courts to reward partial success, not to compensate complete losers.
Congress’s intent in broadening eligibility was to avoid nitpicking about what counts as the “central” issue or “essential” success—not to jettison the requirement of actual success.

Thus, the Fifth Circuit holds that success is a necessary condition for fees under § 1132(g)(1). The only question is whether Cloud met that minimum threshold.

2. Distinguishing “Moral” and “Procedural” Victories from Merits Success

The court then turns to the distinction between different kinds of “wins” in litigation:

Merits success with relief: Obtaining a judgment for money damages, an injunction, declaratory relief, or a remand that materially improves the plaintiff’s legal position (as in Hardt).
Purely procedural victories: Intermediate rulings that do not ultimately change the parties’ legal relationship—such as the reversal of a summary judgment that leads only to further proceedings without any concrete change, or factual findings that are later rendered ineffectual by an appellate reversal.
Moral victories: Judicial statements, criticism, or factual findings suggesting that the plaintiff was wronged or that the defendant acted improperly, but which do not result in any formal relief to the plaintiff.

Drawing heavily on Hewitt and Katherine P., the court holds that only the first category—merits success accompanied by relief—qualifies as “success on the merits” for fee purposes. Purely procedural victories and moral victories fall on the other side of the line.

Judge Ho’s opinion is explicit on this point: Cloud “won nothing from his ERISA suit,” and “[a]t most Cloud won a moral victory.” That, the court declares, is insufficient to justify a fee award.

3. Application to Cloud’s Case

Applying this framework, the court rejects the district court’s reasoning in several steps:

No concrete relief. By the time of the second appeal, Cloud had:
- No judgment awarding him higher-tier benefits;
- No injunction compelling the Plan to alter its procedures;
- No declaratory judgment in his favor; and
- No remand to the Plan that might change his benefit status.
The Fifth Circuit had already directed entry of judgment for the Plan in Cloud I. Thus, in strictly legal terms, Cloud “obtained no relief of any kind.”
Factual findings are not relief. The district court attempted to treat its “Findings of Fact” as a de facto declaration that Cloud’s rights were violated and that he had been wrongfully denied a full and fair review and top-tier benefits. But the Fifth Circuit views these findings as, at most, descriptive statements that do not alter the parties’ legal relationship—especially once the appellate court has reversed the underlying judgment.
Moral satisfaction is not “success on the merits.” Echoing Hewitt, the court characterizes Cloud’s gain as “the moral satisfaction of knowing that a federal court concluded that his rights had been violated,” and explicitly holds that this is “not the stuff of which legal victories are made.”
No principled basis to depart from Supreme Court precedents. The court emphasizes that if “moral satisfaction” could not qualify as success under § 1988 in Hewitt, there is no principled basis to treat it as sufficient under § 1132(g)(1). To do so would be inconsistent with Ruckelshaus and Hardt, which the court views as harmonizing all such fee provisions under the shared requirement of at least some tangible success.

Having found that Cloud lacked the requisite “some degree of success on the merits,” the court concludes that the district court’s fee award was grounded in legal error and must be reversed.

D. Relationship to the Prior Cloud Merits Decision (Cloud I)

An important subtext in Cloud is the tension between:

The earlier panel’s recognition in Cloud I that the Plan likely denied Cloud a full and fair review and that he probably was entitled to top-level benefits; and
The ultimate holding that, due to Cloud’s failure to timely appeal, he is ineligible for reclassification and can obtain no relief from the court.

That tension is precisely what fueled the district court’s effort on remand to preserve an attorney’s fee award based on its factual condemnation of the Plan’s practices. The district court viewed its findings as a kind of declaratory relief, even if the appellate court blocked any benefits award.

The Fifth Circuit, however, frames Cloud I as dispositive on the core question: Cloud cannot be reclassified and cannot receive a new review; any remand would be a “useless formality.” That conclusion, in turn, means that whatever factual findings or moral judgments the district court made are legally inert. They do not—and cannot—translate into any practical remedy for Cloud.

Thus, Cloud I closes the door on any form of relief, and the present opinion holds that, with that door closed, no fees can be awarded, regardless of how morally compelling Cloud’s plight might appear. The case starkly illustrates how procedural defaults (such as failure to timely appeal) can prevent even a sympathetic and arguably deserving claimant from achieving the type of success necessary to justify fee-shifting.

E. Impact and Future Implications

1. ERISA Fee Litigation in the Fifth Circuit

For ERISA practitioners in the Fifth Circuit, Cloud sends a clear message:

To recover attorney’s fees under § 1132(g)(1), a party must secure some concrete form of relief: benefits, an order of remand that improves the claimant’s position, a declaratory judgment clarifying rights, or an injunction.
Favorable language in an opinion, critical factual findings about plan conduct, or expressions of judicial disapproval—without more—do not suffice.

Strategically, this has several implications:

Litigation strategy and timing: Claimants and counsel must be vigilant about preserving procedural rights (such as timely appeals or administrative remedies), because a failure that ultimately blocks relief will also block any possibility of fee recovery.
Settlement posture: Plans may feel more secure in resisting fee demands after a plaintiff loses on the merits, even if the court’s language is critical of the plan’s conduct. Plaintiffs can no longer plausibly argue that such criticism alone entitles them to fees.
Remand orders: Following Hardt, a remand that substantially improves a claimant’s prospects can qualify as “some success.” Cloud reinforces that, by contrast, a denial of remand or a conclusion that remand would be “useless” eliminates any basis for fees.

2. Beyond ERISA: Other Discretionary Fee-Shifting Statutes

Although the case arises under ERISA, the court’s reasoning relies on—and reinforces—Supreme Court precedent construing other fee-shifting statutes, such as:

42 U.S.C. § 7607(f) (Clean Air Act); and
42 U.S.C. § 1988 (prevailing party statutes in civil rights litigation).

By emphasizing that the difference between “prevailing party” statutes and more flexible “appropriate” or “in its discretion” provisions is only the quantum of success, Cloud strengthens a cross-cutting doctrinal rule: under any fee-shifting statute, some real, tangible success is required; moral or purely procedural victories are categorically ineligible for fee awards.

Thus, litigants invoking discretionary fee provisions in other areas—environmental law, administrative law, or other federal statutory schemes—should expect Fifth Circuit courts to demand an actual change in legal rights or obligations as a prerequisite to fee awards.

3. Policy Considerations and Access to Justice

From a policy perspective, the decision could be viewed in two contrasting lights:

Consistency and fairness to prevailing parties: The opinion is firmly rooted in the American Rule and in the idea that winners should not fund the legal efforts of complete losers. It prevents fee awards based solely on a court’s displeasure with a prevailing party’s conduct, absent an actual legal defeat.
Potential chilling effect on “test cases” or systemic challenges: In cases where relief is procedurally barred—but important rights violations are nonetheless exposed—Cloud forecloses fee awards. That may discourage litigants and pro bono counsel from pursuing cases primarily aimed at spotlighting systemic unfairness or clarifying legal standards where individual relief is unlikely.

Regardless of which policy lens one adopts, the doctrinal rule is clear: courts cannot use fee awards as a vehicle to reward litigants for moral victories or for generating judicial commentary, no matter how important or accurate that commentary may be.

V. Complex Concepts Simplified

A. The American Rule and Fee-Shifting

Under the “American Rule,” each side in a lawsuit generally pays its own attorney’s fees, win or lose. Fee-shifting statutes are exceptions. They allow or require one side—often the loser—to pay the other side’s fees in certain types of cases (e.g., civil rights, ERISA, environmental statutes).

Because fee-shifting is an exception, courts interpret such statutes carefully and usually insist that the party seeking fees must have achieved at least some legal success.

B. “Prevailing Party” vs. Discretionary Fee Provisions

Many statutes, such as 42 U.S.C. § 1988, award fees to the “prevailing party.” This generally means the party that wins a judgment or obtains a court-ordered change in the legal relationship (damages, injunctions, etc.).

Other statutes, like ERISA § 1132(g)(1) and the Clean Air Act’s fee provision, use broader language such as “whenever the court determines such award is appropriate” or “in its discretion.” The Supreme Court has held that:

These broader provisions allow fees not only where a party fully “prevails,” but also where the party partially prevails—e.g., winning important, though incomplete, relief.
They do not authorize fees for parties that achieve no success at all.

C. “Some Degree of Success on the Merits”

In Hardt, the Supreme Court articulated a threshold for ERISA fee awards: a party must show “some degree of success on the merits.” This:

Is a less demanding standard than being a full “prevailing party”; but
Still requires more than a trivial or purely procedural win.

Concrete examples of “some degree of success” may include:

Obtaining a remand that leads to the award of benefits;
Securing a declaratory judgment that clarifies legal rights, even if no money changes hands immediately; or
Winning an injunction that alters the defendant’s obligations going forward.

By contrast, success is not shown where:

A case is dismissed as moot after the court merely comments that rights were violated, as in Hewitt;
A summary judgment is reversed, but the plaintiff later loses on remand, as in Katherine P.; or
A court makes critical factual findings but the final judgment is in the defendant’s favor, as in Cloud.

D. “Purely Procedural Victory”

A “purely procedural victory” is a win on process, not on ultimate rights. Examples include:

Getting an unfavorable ruling vacated and the case sent back for more proceedings, without any change in the parties’ rights yet; or
Winning a motion that gives you a chance to keep litigating, but not actually resolving the dispute in your favor.

Under Hardt, Ruckelshaus, and Cloud, such procedural wins—standing alone—do not justify fee awards unless they lead to actual relief.

E. “Moral Victory”

A “moral victory” occurs when:

The court agrees that the plaintiff was mistreated or that the defendant behaved badly;
But no formal legal relief—no money, no orders, no changed obligations—is granted.

In Hewitt and now Cloud, appellate courts have made clear that such moral victories, while emotionally or publicly significant, do not count as “success on the merits” for fee-shifting purposes.

VI. Conclusion: Key Takeaways and Broader Significance

Cloud v. NFL Player Retirement Plan cements an important principle in the Fifth Circuit’s fee-shifting jurisprudence: even under ERISA’s flexible, discretionary fee provision, a litigant must obtain some concrete relief—some real change in legal rights or obligations—to be eligible for attorney’s fees.

The court’s contribution lies not in inventing a new standard, but in applying and sharpening existing Supreme Court doctrine in a compelling factual setting:

Cloud was a sympathetic plaintiff, likely deserving of better treatment from the Plan.
The district court made strong factual findings criticizing the Plan and expressing moral condemnation of its practices.
Yet, because Cloud’s own procedural missteps rendered any benefits award legally impossible, he ended the litigation with no relief.

By denying fees in these circumstances, the Fifth Circuit:

Reaffirms that moral vindication is not “the stuff of which legal victories are made”; and
Signals to district courts that they cannot salvage fee awards after an appellate reversal by recharacterizing favorable factual findings as a form of declaratory relief.

Going forward, Cloud will serve as a critical citation for ERISA defendants resisting fee awards where plaintiffs have obtained no tangible remedy, as well as for courts seeking to apply Hardt, Ruckelshaus, and Hewitt consistently across different fee-shifting regimes.

For litigants and counsel, the lesson is clear: in the Fifth Circuit, moral victories do not justify fee awards. To recover attorney’s fees under ERISA § 1132(g)(1), a party must secure an actual, legally meaningful victory on the merits.