The 11th Circuits Standard of Review in a Denied ERISA Long Term Disability Claim – Is the Deck Stack Against You?
If your ERISA Long Term Disability claim is denied and you live in Florida, Georgia or Alabama, you need to be aware of how the Federal Court reviews Long Term Disability claim denials.
Once you have exhausted your administrative remedies and the Long Term Disability carrier appears to deny your benefits, you have the right to sue in Federal Court for your Long Term Disability benefits. Unfortunately, there is no right to a jury trial and most Long Term Disability cases that are not settled, are resolved by the Federal Court in what is called a Motion for a Summon Judgment.
The Federal Court will review the Long Term Disability carriers claim file, as it existed as of the date of the last claims denial. The 11th Circuit has directed the District Courts in Florida, Georgia, and Alabama to file a series of steps in reviewing a decision to deny disability benefits.
In the recent case of Ehmann v. Continental Casualty, 209WL482286(N.d.fla.), issued on February 25, 2009 the court reviewed the “Six Step” analysis in reviewing an administrator’s benefits decision:
1. Apply the De Novo standard to determine whether the claim administrators benefits denial decision was “wrong,” i.e., the court disagrees with the administrators decision”; if it is not, then in the end of the inquiry an affirmed denial.
2. If the administrators decision is in fact “De Novo Wrong,” then determine whether the administrator was vested with the discretion of reviewing claims: if not, end the judicial inquiry and reverse the denial.
3. If the administrator’s decision is “De Novo Wrong” and the administrator was vested with the discretion of reviewing claims, then determine whether “reasonable” (supported it). Hence, “review the decision under a new and differential arbitrary and caprious standard”.
4. No reasonable ground exists, but in the inquiry and reverse the administrator’s decision; if reasonable grounds do exist, then determine if the administrator operated under a conflict of interest.
5. If there is no conflict than end the inquiry and affirm the denial decision.
6. If there is a conflict of interest, the apply a “heightened arbitrary and capricious review to the decision to affirm or deny.”
This sixth step was recently eliminated when a conflict of interest is present.
The court held that the existence of a conflict of interest is just a factor for the district court to take into account when determining whether an administrator’s decision was arbitrary and capricious the verdict still remains on the plaintiff to show that the decision was arbitrary and it isn’t the LTD carrier’s burden to prove it’s decision wasn’t tainted by self interest.
So what does all of this mean? One of the first things that an ERISA disability lawyer does is look at your policy to determine whether or not your Long Term Disability carrier has a conflict of interest. What is that? If a Long Term Disability carrier is the administrator of the plan and acts as a fiduciary making discretionary decisions all while serving as a insurance company paying claims out of its offsets then there is a conflict of interest.
In Metropolitan Life Insurance Company v. Glenn, (128s.ct.2343, 171L.ed2d299) (2088), the Supreme Court directed that the Federal Courts should consider Long Term Disability carriers conflicts of interests on determining whether their claims denial decisions are arbitrary and capricious.
In evaluating your denied Long Term Disability claim, ERISA disability lawyer Nancy Cavey will review the language in your LTD policy and determine whether or not there is a potential conflict of interest in applying this multi-step review.