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Bartholomew v. Unum Life Ins. Co., 579 F.Supp.2d 1339 (W.D.Wash. 2008)

Plaintiff, who sued to recover benefits under her long-term disability (LTD) plan, sought to expand the scope of discovery under ERISA by seeking documents outside the Administrative Record. Among others, the Plaintiff requested; “Details of compensation and financial incentives,” “revenue and profitability reports for the last 10 years,” and “[a]ny document discussing the claims handling process published during the last 10 years.” Despite the recent rulings in Abatie allowing weight to be given to structural conflict of interest analysis, the District Count held that Plaintiff was not allowed to engage in a fishing expedition. Here, the discovery requests were not narrowly tailored to lead to discovery of admissible evidence. Therefore, Plaintiff’s request for discovery outside the statutory guidelines was appropriately denied.

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Bartholomew v. Unum Life Ins. Co. of America, 588 F. Supp. 2d 1262 (W.D. Wash. 2008.)

A Plan participant brought suit under ERISA challenging the claim administrator’s decision to terminate long term disability benefits. On a motion for summary judgment, the District Court held that the hearsay rule barred the court from considering documents that discussed the administrator’s past claims handling practices. In its decision, the Court acknowledged that a history of biased claim administration was a key factor in weighing the conflict of interest. Nevertheless, the court held that documents containing a recitation of the defendant’s past administrative abuses did not fall under any of the hearsay exceptions. The court also considered the Regulatory Settlement Agreement (“RSA”) with the Department of Labor and found the report admissible as an admission of a party opponent. However, while the RSA could not be offered as evidence of claims handling in this case, the RSA warranted a more “elevated level of skepticism” with regard to the structural conflict of interest.

Nevertheless, even in light of the structural conflict of interest, the court found that Unum afforded the Plaintiff an opportunity for a “full and fair review” of her claims. Therefore, the administrator’s decision was upheld because it was based on a reasonable interpretation of the plan’s terms and made in good faith.

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Burke v. Pitney Bowes Inc. Long-Term Disability Plan, 544 F.3d 1016 (9th Cir. 2008).

The Plan terminated benefits because it determined that the employee was not totally disabled from any occupation. After appealing their decision and exhausting all administrative remedies, the employee sued in federal court. In light of the recent Supreme Court holding in Glenn, the court vacated the grant of summary judgment and remanded back to the district court to allow the discovery of documents outside the administrative record in order to properly evaluate the structural conflict of interest. The court came to this conclusion even though the employer had no direct financial incentive to deny claims because benefits were paid out of a trust. However, the court disagreed with the holdings in Post v. Hartford (3d Circuit) and Gilley v Monsanto (11th Circuit). Instead, the court reasoned that since the employer would ultimately need to contribute to the trust in order for it to maintain its solvency, it had an incentive to keep claims as low as possible. Therefore, a structural conflict of interest existed.

 Read Judicial Opinion Here

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Caplan v. CNA Financial Corp., 544 F.Supp.2d 984 (2008).

In what appears to be a relatively standard claim for benefits under ERISA, the District Court ruled that it was an abuse of discretion to ignore contrary evidence. When the participant in this case made a claim for disability benefits, Hartford submitted his file to an independent medical evaluation service. The IME opinion, which conflicted with the treating physician opinion, was the basis for Hartford to deny the claim.

The court noted that the participant had submitted a “wealth of evidence” to support his contention that he was disabled. Hartford claimed that their decision was based on the “totality of the medical information provided.” However, the only information that supported the decision was the IME opinion. The court factored the discrepancy in the amount of medical support for Hartford’s decision with the evidence of financial incentives for the IME and found an abuse of discretion in this case.

 Judicial Opinion Available Here

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Garrison v. Aetna Life Ins. Co., 558 F. Supp. 2d 995 (C.D. Cal. 2008)

This case addressed the issue of an employer’s accommodation of an employee’s disability, and how the claim administrator considered that factor when assessing disability. Here, a Boeing employee submitted a claim for benefits under the “own occupation” definition of disability. At the time of her disability, her position was described as “light,” requiring 12-hour shifts and a great deal of travel. In response to the onset of the employee’s disability, Boeing attempted to make accommodations by eliminating the travel requirement and reducing the number of hours worked. Based on the accommodations, the claim administrator reclassified the participant’s occupation from “light” to “sedentary,” and finding that she was capable of sedentary work, denied her claim.

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Golden Gate Restaurant Ass'n v. City and County of San Francisco, 546 F.3d 639 (9th Cir. 2008).

The city of San Francisco passed an ordinance requiring that most city-based employers make a certain level of health care expenditures on behalf of their covered employees.  (Basically, employers were required to either provide health care benefits to employees or pay the City a certain amount of money per employer hour worked to fund a city-run Health Access Plan.)  Employers argued that the ordinance was preempted by ERISA because it impermissibly created an ERISA plan, or related to employers’ existing ERISA plans.  Citing a presumption against preemption, the Court of Appeals for the Ninth Circuit found that the ordinance was not preempted by ERISA.

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Walker v. Metropolitan Life Ins. Co., 585 F. Supp. 2d 1167 (N.D. Cal. 2008.)

Plaintiff sued MetLife and Kaiser Permanente Benefits Plan for denying his claim for long-term disability benefits.  The court denied cross motions for summary judgment on the grounds that the Administrative Record did not contain sufficient information regarding MetLife’ relationship with a company, NMR, retained to conduct independent medical reviews such that the court could assess the impact of MetLife’s undisputed structural conflict of interest.  In order to obtain this information, the court ordered MetLife to provide the number of claims that were approved and denied after a review was conducted by an NMR-retained physician.

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Simon v. Hartford Life, Inc., 546 F.3d 661 (9th Cir. 2008).

Acting pro se, a plan participant filed suit on behalf of the group long-term disability plan, claiming breach of fiduciary duty under 29 U.S.C. Section 1109. The plan administrator filed a motion to dismiss on the ground that the participant must be represented by a licensed attorney in order to proceed with this claim. The district court granted the motion and dismissed the action without prejudice so that the participant could obtain counsel. The district court reasoned that because the plan is a separate entity, the participant was not entitled to bring a suit on the plan’s behalf. The participant appealed.

In upholding the district court’s order granting the motion to dismiss, the Court of Appeals ruled that, under ERISA and 29 U.S.C. Section 1132(a)(2), a participant is not authorized to pursue a claim in a representative capacity on behalf the plan without counsel. The Ninth Circuit explained that any judgment would have significant impact on the plan and the other beneficiaries, and those entities are entitled to representation by a licensed attorney. While, 28 U.S.C. Section 1654, states that “parties may plead and conduct their own cases personally or by counsel.” the court noted that the participant was not representing his own rights, but rather the rights and interests of the employee benefit plan. By proceeding pro se, the participant was improperly attempting to represent a party other than himself. Therefore, absent specific Congressional authorization, only one licensed to practice law may conduct proceedings in court for anyone other than themselves.
 

Read Judicial Opinion Here

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Barger & Wolen, LLP partner Robert J. McKennon discusses the requirement for regular and appropriate care in disability cases. Published by the Defense Research Institute, this article provides a solid background on the various factors the courts consider when reviewing a “regular care” or “appropriate care” provision.

Article is Available Here

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