Claims Processes and Standard of Review in ERISA Litigation
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2017.07.05  Substantial Compliance Suffices re Claims Procedures. The 8th Circuit held as follows in Cooper v. MetLife

  • As our sister circuits have recognized, the proper inquiry in analyzing a claim administrator’s compliance with § 2560.503-1 is “substantial compliance,” rather than “technical compliance.” See Grasso Enters., LLC v. Express Scripts, Inc., 809 F.3d 1033, 1038 (8th Cir. 2016) (citing Lafleur v. La. Health Serv. & Indem. Co., 563 F.3d 148, 154 (5th Cir. 2009)). “While we have not expressly adopted this substantial compliance standard, we have applied a substantively equivalent standard, evaluating whether a plan’s entire claim denial process provided the claimant ‘a full and fair review of her claim.’” Id. (quoting Midgett v. Wash. Grp. Int’l Long Term Disability Plan, 561 F.3d 887, 896 (8th Cir. 2009)).

2017.03.20​  Failure to Follow Claims Procedures Results in De Novo Review (2nd Cir.). Halo v. Yale Health Plan 819 F.3d 42 (2d Cir. 2016) essentially holds that an administrator must strictly comply with DOL claim regulations or lose the benefit of the arbitrary and capricious standard of review.  That result occurred in Schuman v. Aetna Life Ins. Co. (D. CT 2017.03.20), and resulted in de novo review.

2016.07.25  ERISA Penalties - Not for Failing to Produce Relevant Emails, Etc.  In Lee v. ING Group, the 9th Circuit held that -- 

  • the district court properly imposed a penalty under 29 US.C. § 1132(c)(1) on the ERISA plan administrator for failing to produce the Plan Document within 30 days of the plaintiff’s request. The panel reversed the district court’s decision to impose a penalty based on the plan administrator’s failure to timely produce emails.

2016.04.21 Burden Shifts to Employer re Corporate Form and Participant Records, in Benefit Claim Dispute.  In Estate of Barton v. ADT, a 9th Circuit Panel held as follows, quoting here from the court's summary of its decision:

  • ​The panel held that the burden of proving entitlement to benefits was not properly placed on the plaintiff because the defendants were in a better position to ascertain whether an entity was a participating employer in the ERISA plan. The panel held that when a claimant has made a prima facie case that he is entitled to a pension benefit but lacks access to the key information about corporate structures or hours worked needed to substantiate his claim, and the defendant controls such information, the burden shifts to the defendant to produce this information. The panel remanded the case to the district court to apply the correct burden of proof.

2016.02.17  Procedural Stumbles in Claim Processing do not trigger De Novo Review.  In Messick v. McKesson, the 10th Circuit remanded a disability claim for second-stage review under the plan's claims procedures, because the employer's initial claim denial letter was sent to the wrong address.  The court's decision began by noting that "not all procedural irregularities require de novo review," and went on to find as follows: 

  • LINA’s failure to properly address its denial letter cut off the administrative process midstream. Messick never filed a second-level appeal because he was never informed of the first-level denial. We accordingly lack a complete administrative record to review.
  • ​Our case law has long recognized the importance of completing the administrative review process before filing suit.
  • ​[footnote 2] Defendants highlight the fact that ERISA does not require a second-level appeal. See Hancock v. Metro. Life Ins. Co., 590 F.3d 1141, 1154 (10th Cir. 2009). But “it is necessary to look not just to the minimum [procedural] standards of ERISA but also to the terms of the plan itself.” Gaither v. Aetna Life Ins. Co., 394 F.3d 792, 804 (10th Cir. 2004). Because the STD Plan required a second-level appeal as a condition to filing suit, the administrative record is not complete until that second appeal is final. See Holmes v. Colo. Coal. for the Homeless Long Term Disability Plan, 762 F.3d 1195, 1203-04 (10th Cir. 2014) (a plan participant does not properly exhaust administrative remedies by filing only a first-level appeal if a plan requires a second-level appeal). [emphasis added]