Since the Glenn decision, a number of circuits have had an opportunity to consider and apply the Glenn Court’s reassessment of ERISA’s standard of review.Roumeliote v. LTD Plan for Employees of Worthington Industries, 298 Fed. Appx. 472 (6th Cir. 9/11/2008).

This was the first circuit to apply Glenn since Glenn was a Sixth Circuit decision and the Sixth Circuit’s determination in that case was affirmed by the Supreme Court. The Sixth Circuit affirmed the district court’s decision that the claim administrator’s denial of benefits was not arbitrary.

Doyle v. Liberty Life Assurance Co. of Boston, 542 F.3d 1352 (11th Cir. 9/28/2008).

Doyle represented a situation wherein a claimant with fibromyalgia was denied LTD benefits. Liberty Life reviewed the medical documentation Doyle presented, received further peer review from a specialist in internal medicine and upheld its decision denying benefits, contending that Doyle could perform the duties of her own occupation.

The district court upheld the denial, and on appeal, the Eleventh Circuit found that its prior conflict of interest standard could not be maintained in light of Glenn. Under its prior jurisprudence, a conflict of interest did not obviate deferential review, but a highly deferential review was inappropriate.

The district court concluded that the administrative record showed that the conflict had not led to any impropriety. The Eleventh Circuit found that the district court’s method of assessing the record as a whole to see what effect the existence of the conflict had in the determination was a reasonable approach and that its analysis was consistent with Firestone and Glenn. The question then boiled down to whether the district court had appropriately weighed the conflict in assessing Liberty Life’s claim denial. The Eleventh Circuit concluded that it had, and upheld the lower court’s affirmance of Liberty Life’s

Burke v. Pitney Bowes, Inc. Long Term Disability Plan, 544 F.3d 472 (9th Cir. 9/19/2008).

Pitney Bowes had established a Voluntary Employee Beneficiary Association (VEBA) Trust to pay for its LTD benefit program. Burke’s claim was denied because the Committee determined that her injuries were work related, and thus not covered. Burke sued, and in a settlement she was awarded benefits as long as she met the Plan’s definition of Total Disability. The Committee determined that Burke failed to meet this definition and terminated her benefits. Burke again challenged the denial in court. Prior to Glenn, the district court, following a 1995 precedent of the Ninth Circuit, held that there was no conflict of interest because the plaintiff failed to produce evidence that the self-interest had caused the claims fiduciary to breach of its duties. The Ninth Circuit reassessed Pitney Bowes’ conflict in light of Glenn. It noted that a structural conflict did exist and had to be assessed.

The Ninth Circuit thought it significant that the employees also contributed to the VEBA Trust, and this also lessened the impact of the conflict. As in Glenn, however, the employer both funded the Plan and made final claim determinations, and this increased the significance of the structural conflict factor. The Ninth Circuit vacated the lower court’s decision and remanded the case back to the district court to assess the conflict as a factor in the decision-making process and review any new evidence Burke might present as to the impact of the conflict on the decision-maker.

Champion v. Black & Decker, 2008 WL 5377692 (4th Cir, 12/19/2008).

The plaintiff had been awarded disability benefits but they were terminated after 30 months because the claims administrator had determined that Champion’s disability was due to mental illness, and under the terms of the Plan, no benefits were payable on account of disabilities based on mental illness after 30 months.

The Fourth Circuit acknowledged Glenn by reviewing the administrative record for any evidence of “improper intent”. Chief Justice Robert’s actually preferred this test in opposition to the majority opinion which permits conflicts to enhance the significance of other factors already considered by reviewing courts, even if the conflict is not shown to have played any role in the denial of benefits.” Under Champion, the lack of evidence of bias leaves all other factors the same as if there were no conflict. I took issue with this approach here.

Champion sued and the court ordered a remand to the Plan, which reaffirmed its initial denial based on its consulting physician’s assessment of Champion’s epilepsy. Champion went to court over this redenial, and the district court this time affirmed the Plan’s determination. Champion appealed. Interpreting Glenn, the Fourth Circuit emphasized its holding that where the Plan administrator serves in the dual role itself creates a conflict of interest.

The conflict is merely a factor to be considered and this assessment ‘is similar to that followed by courts generally in applying and multiple-factor test to review for reasonableness.” Following this guidance, the Fourth Circuit affirmed the denial. Consequently, the Fourth Circuit found no evidence that the Plan administrator had abused its discretion in denying her claim.

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This entry was posted by Adam V. Russo on Tuesday, March 24th, 2009 at 4:09 pm and is filed under 11th, 4th, 6th, 9th. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.